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"Abolish minimum wage" - Pianim
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Business News of Thursday, 21 September 2006

Source: GNA

"Abolish minimum wage" - Pianim

Akosombo, Sept. 21 - Mr Kwame Pianim, an Economist, has called for the abolition of the minimum wage policy saying in a market-based economy it keeps people away from the employment stream. Speaking to the Ghana News Agency on Thursday at Akosombo in the Eastern Region, he said under a market-based economy, the existence of a minimum wage policy did not make sense.

"Once you attract investors in, let them pay what they want; as more and more companies come in, there will emerge competition among the workers."

If you are looking for people who are into sewing you can't go and train new people so their wages start going up,=94 Mr Pianim said. Mr Pianim urged policy makers and trade unions to reflect on the issue saying 93we should let people enter employment and allow market forces work to determine the price of labour.

"We need people to be employed and we can achieve this when we see Ghana as a relatively cost effective source of cheap labour. Minimum wage is an artificial wage which scares employees from entering the market. What we need is a living wage and not a minimum wage because once there are jobs, people will do about two to three jobs to earn a living wage and one does not expect to earn a living wage out of one job."

Mr Pianim recommended that instead of having a body to set a minimum wage across board, negotiations for increases in wages and/or salaries should rather be left to labour unions in institutions and organisations.

"Minimum wage is an anachronism, something we inherited from our socialist past and once we are running a market-based economy we want people to use labour intensive methods and not substitute capital for labour since labour is troublesome and expensive to employ."

Mr Pianim said banks and non-bank financial institutions were increasing their wages and therefore paying well because of the healthy competition among them.

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