According to a recent Ghana Statistical Service (GSS) study, variations in the amounts of allowances provided to public sector employees are escalating wage disparities.
According to a research titled “Ghana 2022 Earnings Inequality in the Public Sector,” those with basic salaries between GH¢5000 and GH¢9999 receive average allowances that are more than 26 times bigger than those with basic salaries below GH¢1000.
As a result, there is now a bigger disparity in the gross salaries of employees, with those who earn higher average net salaries also receiving higher allowances.
Prof. Samuel Kobina Annim, the government statistician, commented on the report’s results and suggested that one strategy to combat income inequality was through progressive statutory deductions, where higher incomes were required to pay more.
Although progressive, he claimed that the differences in deductions between income categories had little effect on lowering earnings disparities.
According to the report, those earning between GH¢2999 and GH¢1000 paid 20% of their gross wage in statutory deductions, compared to those earning over GH¢10,000 who paid an average of 25% of their total salary.
“However, the rate of upward changes in earnings between ages 20 and 40 years is marginally steeper compared to increases after age 40 years,” the study revealed.
687,984 public sector workers who worked for 50 Ministries, Departments, and Agencies (MDA) and were enrolled on 129 payrolls and got GH¢2.3 billion in salary and benefits were the subjects of the study’s analysis of their December 2022 earnings.
The information obtained from the Controller and Accountant General’s Department was incomplete because it didn’t include personnel of public universities, security services, or other non-subvented organizations.