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Current Minimum Wage: Nadia Ohene Adjabeng

The document discusses the minimum wage in Ghana. It defines minimum wage as the lowest rate employers can legally pay workers. The current minimum wage in Ghana is GH₵9.68 per day but will increase to GH₵10.65 per day in January 2019. Factors that influence minimum wage include equilibrium wages, economic growth, and unemployment rates. Both pros and cons of raising minimum wage are mentioned, with the main pro being increased wages for low-income workers and the main con being potential job losses if wages are raised too high.

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Melaine
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75 views

Current Minimum Wage: Nadia Ohene Adjabeng

The document discusses the minimum wage in Ghana. It defines minimum wage as the lowest rate employers can legally pay workers. The current minimum wage in Ghana is GH₵9.68 per day but will increase to GH₵10.65 per day in January 2019. Factors that influence minimum wage include equilibrium wages, economic growth, and unemployment rates. Both pros and cons of raising minimum wage are mentioned, with the main pro being increased wages for low-income workers and the main con being potential job losses if wages are raised too high.

Uploaded by

Melaine
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Current

Minimum Wage
Nadia Ohene Adjabeng
Contents

What is Minimum Wage?

Factors That Influence the Minimum Wage.

The Current Minimum Wage Of Ghana.

The Pros And Cons Of Raising The Minimum Wage.


What Is Minimum Wage?
• Wage rate established by collective bargaining or by government
regulation that specifies the lowest rate at which labour may be
employed. The rate may be defined in terms of the amount, period (i.e.,
hourly, weekly, monthly, etc.), and scope of coverage. For example,
employers may be allowed to count tips received by employees as
credits toward the mandated minimum-wage level.
Some Factors That Affect The Minimum Wage.
• 1. Equilibrium wages;
In theory, if the minimum wage is set above the equilibrium wage rate it
will cause unemployment and demand for labour falls. Therefore, the
government will seek to work out the equilibrium wage rate that firms
will be willing to pay. If minimum wages are increased substantially above
the competitive equilibrium it can cause ‘real wage unemployment’.
Continuation
2. Economic Growth
Unemployment is cyclical in nature. During economic expansion, firms’
demand for labour increases and they will be willing to pay a higher wage.
However, in a recession, there is often stagnant wage growth and firms are
more reluctant to employ labour. Therefore, some argue, in a recession it
is a mistake to increase the national minimum wage rate as this will add to
the unemployment problem. However, when the economy is growing e.g.
97-07, increases in minimum wage don’t cause unemployment.
The Current Minimum Wage Of Ghana
• The minimum wage in Ghana accounts the lowest amount a worker can
be legally paid for work done. It was set up to protect Ghanaians from
extortion and being used by employers who reap the benefits of their
hard work. It is a regulatory process that is mandatory for all employers
to follow to avoid a running with the Government of Ghana.
• The current daily minimum wage in Ghana stands at GH₵ 9.68. This
came after a 10% increment made by the Government that started in
January 2018. Although, based on the yearly minimum wage rate, Ghana
ranks at 110 over the 197 countries that have high minimum wages.
Continuation
• The National Tripartite Committee (NTC) announced a 10% daily
minimum wage increase on Thursday, July 26, 2018. This means
Ghanaians will expect a minimum of GHc10.65 up from the previous
minimum of GHc9.68. However, you will have to wait longer since the
new wages come into effect on January 2019.
The Cons of Raising The Minimum Wage.
• Unemployment
A possible disadvantage of increasing the minimum wage is that it could
have a detrimental affect on employment. If companies suddenly have to
pay employees more than they did in the past, they may decide to hire
fewer employees or lay off workers. This could lead to higher rates of
unemployment and more competition for jobs. In a 2008 article titled
"Behind the Minimum Wage Debate," CNN reports that unemployment
increased during the late 2000s, which coincided with increases in the
minimum wage, although it is not clear how much of an impact the
minimum wage itself had on employment.
The Pros of Raising The Minimum Wage.

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