According to a new Ghana Statistical Service (GSS) study, disparities in allowances given to public sector employees are aggravating income inequality.
This creates a broader disparity in gross earnings of employees, with individuals earning a higher net salary averaging higher allowances.
The study, titled “Ghana 2022 Earnings Inequality in the Public Sector,” indicates that the average allowances for those with a basic salary of between GH₵5000 and GH₵9999 are over 26 times larger than their counterparts with basic salaries below GH₵1000.
Prof Samuel Kobina Annim, the Government Statistician, believes that one way to address earnings inequality is through progressive statutory deductions in which higher earners pay more.
The study showed that while those with a salary above GH₵10,000 had a statutory deduction of an average of 25% of gross salary, those with a salary between GH₵2999 and GH₵1000 paid 20% of the gross salary as statutory deductions.
It was also discovered that basic salary, deductions, and allowances all increased with age, peaking for those between the ages of 50 and 60.
The report revealed that the rate of upward changes in earnings between the ages of 20 and 40 is marginally steeper than increases after age 40.
The study reviewed the earnings of 687,984 public sector employees from 50 Ministries, Departments, and Agencies (MDAs) and 129 payrolls in December 2022, who received GH₵2.3 billion in salaries and allowances. However, data from Article 71 office holders, public university employees, security agencies, and other non-subvented institutions were not included.