[BLOG] Trends on the Labour front in Ghana
Ghana, over the last two decades, has succeeded in providing a marginal solution to the problem of unemployment and poverty. The impact of implementation of stabilization and structural adjustment policies are being used as a vehicle to enhance economic growth and development.
The success of any adjustment program depends on a well-functioning and flexible labour market in which labour allocation is done through the market mechanism, and also creates sufficient incentives for human capital investment. The presence of wage rigidities or labour mobility raises basic questions in terms of the effectiveness of macroeconomic policy and the extent to which the supply response necessary for adjustment will be forthcoming.
Ghana has witnessed some changes in the labour market due to globalization and the withdrawal of the direct involvement of government in productive economic activities. Stabilization and adjustment programmes initiated have contributed to a substantial decline in public sector employment and through public sector retrenchment and privatization.
Ghana's labour market is dominated by agriculture and related activities. The informal sector where majority of the workforce is self-employed is very pervasive, partly as a result of the sluggish growth of the formal sector employment. The public sector continues to employ the greater chunk of the formal sector workforce.
The government and labour unions together with employers play a significant role through the determination of minimum wage by the Tripartite Committee in shaping the structure of wages in the formal wing of the labour market. The market evidently appears to exhibit wage rigidities as a result of the strong influences of institutions in the market.
Since the year 2000, formal sector employment, which incidentally has been most remunerative, has increased substantially. Formal sector employment seems to have picked up with the declining share of informal sector.
Isaac Twumasi-Quantus is Webmaster, Editor @Africa Business Communities in Ghana.
This article was originally posted on Ghana Business Communities
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