Excess labour supply responsible for businesses failing to pay national minimum daily wage – Labour expert  

Excess labour supply responsible for businesses failing to pay national minimum daily wage – Labour expert  

Labour expert, Aaron Kumah, has attributed the deliberate failure of some business owners to pay their low wage workers the national minimum daily wage to labour exceeding jobs in the market.

Mr Kumah said due to job unavailability unemployed persons accept any offer that comes their own without considering the minimum daily wage hence business owners take advantage of that.

The senior lecturer at Akenten Appiah-Menka University of Skills Training & Entrepreneurial Development said high employment also hinders the increment of salaries of low wage workers despite a standardised national minimum daily wage.

“In this world, in everything, we do we have something in economics called demand and supply. If there are many goods in the market, the buyer has several alternatives. The buyer chooses what he or she wants. If the good is scarce there’s a higher demand for it and people are willing to purchase at any given price.”

“In Ghana, the people ready and available to work often termed as the supply of labour exceeds available jobs.  There are few employment opportunities and a large supply of labour. If this happens when one seeks a job and the minimum wage is GHS12.53 but the business owners is willing to pay GHS10 the person will grab the job because without it he’d be jobless. If he refuses to take the offer another unemployed person will take the offer. It makes it tedious for the government to enforce the minimum wage laws,” he said.

Due to these factors, he told Kwaku Owusu Adjei on Adwenekasa socio-political programme on Original 91.9FM Friday that, business owners rarely comply with the minimum wage laws to meet workers expectation.

His comments come a day after the National Tripartite Committee announced GH¢12.53 pesewas as the new National Minimum Daily Wage for this year, representing a 6% increase.

That of next year will be GH¢13.53 pesewas, an 8% Jump.

In enforcing the national minimum daily wage Mr Kumah proposes that government considers paying the GHS12.53 to unemployed citizens and also focus on job creation to alleviate poverty in the country.

He said the government cannot afford to pay employment benefits to the citizenry however creating jobs will solve the problem hampering the progress of the country.

“The government must do two things. It should register unemployed people and pay them the minimum wage whether they’re working or otherwise. If the government proceeds on that tangent when a business hires an unemployed and decides to pay less than the minimum wage, definitely the person will decline such job offer unless the employer pays the worker the minimum wage or more than that,” Mr Kumah said.

“Also, the government should create more jobs. There should be an abundance of jobs. It will create employment opportunities. When the government does that there would be few job seekers. The private employer cannot insist on paying less than the minimum wage.”


The determination of the national minimum wage is in accordance with Section 113 (1) (a) of the Labour Act, 2003 (Act 651).

The National Tripartite Committee indicated that the Covid-19 pandemic and its attendant economic hardships strongly influenced the percentage increases of the National Daily Minimum Wage rate.

“In determining the new rates, the NTC took into account the impact of the Covid-19 pandemic on the national economy, cost of living, sustainability of businesses and the desirability of attaining a high level of employment,” it stated.

The National Daily Minimum Wage rate for 2021 is to come into effect starting June 4, 2021, whereas that for 2022 comes into effect, January 1, 2022.

Thus, the Committee directed all organisations whose Daily Minimum Wage is below the 2021 National Daily Minimum Wage to adjust their rates accordingly with effect from June 4.


By: Bernard Ralph Adams | Metrotvonline.com | Ghana


Leave a Reply

Your email address will not be published. Required fields are marked *