Is Teacher Unions 25% Demand in Salary Increment Feasible?
Teacher Unions demands for salary to be increased by 25 percent and the minimum wage to be increased from 11 cedis to 15 cedis.
Teacher unions proposed this percentage for the negotiation of new salary base pay for 2021.
This article is to analyze the 25 percent proposed increment in salary, if it is feasible for government to afford.
Salary negotiations are done in a series of consultations with the Labour Unions and the government represented by the finance ministry.
Salary negotiations is for all public sector workers in the country not only teachers.
The interaction of public and corporate wages has largely been neglected by research in past decades, even though public wage spillovers may be an important ingredient of the level and distribution of wages.
Teacher unions are making these demands base on the economic condition in the country, Ghana is not picking up the broken pieces caused by Covid19 in the economy, increasing salary by 25 percent will be difficult for the state to do, though prices of goods and services have been increased.
Some labor unions have supported the demand of 25 percent increment but our economy as it stands now cannot afford 25 percent increment in salary.
Although sudden wage increase attenuates a series of possible biases, a potential criticism of the research setting can be the endogeneity of the share of public sector workers.
If workers receive a pay increase, then there will be a rise in consumer spending. Low-income workers are likely to have a higher marginal propensity to consume (in other words they spend high % of extra pay). This could also cause a multiplier effect, with higher spending causing knock-on effects to elsewhere in the economy, this should help boost economic growth.
The 25% salary increment is not feasible, there will be a pay rise for all public sector workers which will not be more than 12.5 percent of their basic salary. New salary base pay for all public sector workers likely to take effect from June, 2021.
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