Low income earners may struggle if inflation goes higher than 10% in 2018

Low income earners may struggle if inflation goes higher than 10% in 2018
Source: Ghana|Myjoyonline.com|Nathan Gadugah
Date: 12-07-2017 Time: 08:07:42:pm

Employees who will earn 9.68 cedis or lower per day must hope for a single digit inflation in 2018 or face dire economic situation.

According to the Secretary General of the Trades Union Congress, Dr Yaw Baah the ten per cent minimum wage increase announced yesterday was fixed with an expected single digit inflation in mind.

He said members of the tripartite committee that announced the new minimum wage considered a possible drop in inflation to single digit in 2018 and hoped that projection would be achieved.

The Committee announced a new minimum wage from 8.80 cedis to 9.68 which represents 10% increase. It would however take effect in 2018 to allow employers and government to plan ahead.

Despite the increase many Ghanaian workers say the amount is woefully inadequate.

In a chat with Joy News a worker named only as Linda narrated how she has been surviving with a meagre 10 cedis per day salary.

She has to buy four cedis worth of lunch and that should keep her going for the day.

What to wear, where to sleep and how to pay for education which are basic necessities of life have not been factored into her payment.

As if that is not enough, her situation could become worse if the inflation target for 2018 remains the same or goes further higher than it is now.

In June, inflation is hovering around 12% higher than the projected target.

If the inflation figure remains the same it means Linda or people like her may have a slight increase in the minimum wage but may still buy far lower than they would have bought because the prices will increase.

Her situation may be worse if inflation does not hit the projected 10% and sustained as well.

The last time the country recorded a single digit inflation was in December 2012 and it was 8.8% which rolled over to January 2013 but the country has since recorded double digit inflation despite it being more stable in the last couple of months.

Dr Yaw Baah is hopeful inflation will be lower than 10% to give the lower income earners a reprieve.

He admitted however that the minimum wage is not encouraging but under the prevailing economic situations that is what employers and government can afford.

He called for more vigilance to ensure that employers do not pay below the minimum wage.

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