Minimum Wage Fixing in Ethiopia: A long overdue & unanswered demand

By Solomon Zena

Existing records within the Ethiopian trade union movement indicate that the issue of fixing a minimum wage in Ethiopia has long been overdue and remains unaddressed to this day.

Seeking resolution, the Confederation of Ethiopian Trade Unions (CETU) has persistently appealed to policymakers and influencers to uphold the country’s laws and respond to demands that have been stalled since 2019.

Despite delays in implementing the law and responding to demands, Ethiopia has demonstrated its commitment to establishing a minimum wage system by taking several significant steps in that direction. Firstly, it has enshrined the legality of a minimum wage and established a mechanism to determine and adjust minimum wages over time through Labour Proclamation No. 1156/2019.

Under Article 55 (2) of the proclamation, a Minimum Wage Board comprising representatives from the Government, Employers, and Trade Unions is mandated to be established.

This board is tasked with fixing and periodically revising the minimum wage, considering factors such as the country’s economic development, labor market conditions, and other relevant considerations.

Furthermore, the Council of Ministers is entrusted with enacting regulations that define the conditions of establishment and delineate the powers and responsibilities of the board. This represents a significant commitment by the nation towards establishing a minimum wage system.

To actualize this legal provision, a High-level Tripartite Workshop convened in Bishoftu from 14-15 May 2019 aimed at devising a roadmap for implementing a sustainable minimum wage system in Ethiopia.

Organized by the Ministry of Labour and Social Affairs with the support of the International Labour Organization (ILO), the workshop brought together key stakeholders to deliberate on crucial issues, opportunities, and challenges.

Participants acknowledged Ethiopia’s transformation journey, emphasizing industrialization, investment in infrastructure, and employment creation as key priorities for the nation’s development agenda.

They recognized the significance of a minimum wage in protecting workers and their families while addressing challenges such as low productivity, informality, and poverty levels.

In early 2020, the Tripartite Advisory Board discussed the establishment of the Minimum Wage Board, drafted regulations defining its powers and responsibilities, and submitted them to the Council of Ministers. However, despite these commitments, minimal progress has been made towards establishing a minimum wage system in Ethiopia.

As a result, low-paid workers and vulnerable groups continue to bear the brunt of soaring inflation and the escalating cost of living.

The persistent issues of wage inadequacy, distortions, and inequities underscore the urgent need for the establishment of a Minimum Wage Board as a crucial mechanism to address these challenges.

In light of these circumstances, CETU has appealed to Prime Minister Abiy Ahmed, urging swift action from relevant authorities to alleviate the plight of vulnerable workers. Drawing from ILO labor standards and international experiences, CETU emphasizes the importance of evidence-based social dialogue and clear criteria for setting and adjusting minimum wages.

Minimum wage systems exist in over 90% of ILO member states, with many countries, including those in Africa, having implemented such systems.

CETU believes that fixing a minimum wage is essential for protecting workers, reducing poverty and inequality, promoting social justice, and ensuring equitable distribution of resources.

As Ethiopia celebrates its 100th Anniversary of ILO Membership, CETU calls upon policymakers to prioritize the establishment of a minimum wage system as a matter of urgency, recognizing its significance in advancing social justice and equitable development.

By Solomon Zena

Communication Officer of CETU

Editor’s note: – views in the article reflect the views of the writer only!!


Leave a Reply

Your email address will not be published. Required fields are marked *