“Minimum wage no longer realistic” amid rising living costs – researcher

Ghana should begin transitioning from a minimum wage framework to a “living wage” model as rising costs continue to outstrip incomes, according to a new cost of living report.

Smart Sarpong, Director of Research and Innovation at Kumasi Technical University, said current wage structures no longer reflect economic realities faced by workers.

“I agree that we should be discussing a living wage,” he said on the Asaase Breakfast Show on Wednesday (13 May). “The current minimum wage cannot sustain basic living expenses.”

Public-private wage gap widens

The report highlights a significant disparity between public and private sector earnings, with public sector workers often earning two to three times more than their counterparts.

Sarpong warned that the imbalance is placing private sector workers at a severe disadvantage.

“A teacher or nurse in the private sector may earn far less than someone with the same qualifications in the public sector,” he said.

Multiple jobs becoming the norm

The study also found that many households are increasingly dependent on secondary income sources.

“People are splitting their time between their main jobs and side activities just to survive,” Sarpong said.

This trend, he noted, is affecting productivity and long-term economic stability.

Savings decline and survival economy emerging

With limited savings capacity, many households are shifting toward a survival-based financial model.

“Only a small proportion of people can save, and even that is inconsistent,” Sarpong said.

He described the situation as a gradual shift toward a “salary-to-salary” economy, where financial security is increasingly fragile.

Sarpong urged government to consider targeted policies, including:

• Incentives to improve private sector wages
• Adjustments to tax structures
• Interventions in high-cost sectors

He stressed that bridging income inequality and aligning wages with living costs are critical to stabilising the economy.

“If salaries remain disconnected from living conditions, the pressure on households will continue to intensify,” he said.