CERPA advocates for blended wage system to boost productivity, meet labour demands
The Centre for Economic Research and Policy Analysis (CERPA) has published a new policy brief examining the feasibility and implications of transitioning to an hourly wage system in Ghana.
The brief, co-authored by Research Fellow Elizabeth N. Appiah (PhD) and Research Manager, Augustine Owusu Mensah responds to growing calls for wage structures that better reflect productivity, fairness, and flexibility in a rapidly evolving labour market. The Centre for Economic Research and Policy Analysis (CERPA) has published a new policy brief examining the feasibility and implications of transitioning to an hourly wage system in Ghana.
The brief highlights the following:
Ghana’s Labour Market in Transition – Ghana’s labour force remains dominated by informal work and irregular employment patterns. With over 80% of workers in the informal sector and increasing underemployment—especially among youth—the need for wage reform has become more urgent. Ghana’s current monthly wage structure, while offering income predictability, often overlooks actual hours worked and productivity, particularly in low-income and part-time roles.
The Case for an Hourly Wage System – CERPA’s analysis outlines several advantages of introducing a minimum hourly wage model including:
- Fairer compensation tied directly to hours worked
- Flexibility for part-time and informal workers
- Potential to increase income through overtime
- Improved budgeting and transparency for workers
Implementation Risks and Considerations: Despite the benefits, CERPA cautions that a shift to hourly wages must be carefully managed. Key risks include:
- Income instability and lack of job benefits
- Risk of exploitation without robust enforcement
- Potential job displacement in small and medium enterprises.
Recommendations for a Successful Transition: To enable a smooth and inclusive rollout of an hourly wage system, CERPA proposes:
- A Legal reform to define and protect hourly workers under the Labour Act
- A phased rollout beginning with the 24-hour economy priority sectors
- Public awareness campaigns to educate employers and employees
- Strengthening of labour inspection and enforcement systems
- Investment in digital platforms to improve wage traceability and compliance
A Hybrid Approach for Ghana – CERPA recommends a hybrid model that blends the strengths of both monthly and hourly systems, tailored to Ghana’s diverse employment realities. An hourly wage model, if well-designed, can promote equity, stimulate productivity, and offer greater protection to Ghana’s most vulnerable workers.
