The Confederation of Ethiopian Trade Unions (CETU) has repeatedly urged the government to establish a minimum wage level for workers across various sectors.
Despite these calls, the determination of a national minimum wage remains pending, as the government has extended the decision-making period.
In recent developments, the Ministry of Finance announced a significant budget allocation of 91.4 billion birr, designated for a salary increase for government employees.
This move follows the government’s announcement, made a month earlier, regarding the anticipated salary adjustments for public sector workers.
This salary increase is set to benefit approximately 2.3 million federal and state government employees, including 56,000 appointees, as well as state police, federal police, defense forces, and other security agencies.
Finance Minister Ahmed Shide, introducing the detailed wage adjustments, emphasized that “low-wage workers will be better protected against the rising cost of living and will be able to withstand the financial pressures brought about by inflation.”
As a result of this increase, the minimum salary for government employees will rise to 4,760 birr, marking a substantial 332.7% increase from the previous base salary of 1,100 birr.
Meanwhile, the highest-paid government employees, who were previously earning 20,468 birr per month, will see a 5% salary increase, bringing their monthly wage to 21,491 birr.
Despite these adjustments, a significant portion of government workers continues to face financial challenges.
Approximately 47.9% of public sector employees earn less than 6,000 birr per month, leaving many to struggle with basic living expenses.
The majority of government employees earn around 6,000 birr, which equates to roughly $55 per month.
Of the remaining workforce, 41% earn between 6,000 and 10,600 birr per month, a range classified as “normal poverty.”
Those earning above 10,556 birr fall into the category of “mild poverty.” These classifications are based on international standards for food and non-food expenditures, as well as data from the Ethiopian Central Statistics Service’s household survey.
The Ministry of Finance has indicated that determining a fair minimum wage requires further research, including assessments of the nation’s economic growth, productivity levels, monthly consumption rates, and the minimum caloric intake required for a person to survive.
These factors must be carefully evaluated before a comprehensive wage policy can be established.
Ethiopia’s last wage reform took place six years ago, and since then, the country’s economic conditions have shifted dramatically.
The purchasing power of the Ethiopian birr has weakened by over 100%, exacerbated by foreign exchange rate fluctuations.
Currently, one US dollar is exchanged for 108 birr, which has significantly increased the cost of living, leaving many government employees more financially vulnerable.
Mr. Kassahun Folo, President of the Confederation of Ethiopian Trade Unions, has expressed frustration over the government’s delayed response to CETU’s repeated requests for the establishment of a minimum wage.
He has also called for a reduction in employment taxes, as the rising cost of living continues to outpace wage growth. “There are still workers who struggle to afford even one meal a day,” Mr. Kassahun stated, emphasizing the severity of the issue for low-income workers.
In response, the Ministry of Finance has reiterated the need for more comprehensive research before determining the minimum wage threshold, citing the complexities involved in establishing a fair and sustainable wage policy for the country.
The delay in setting a minimum wage underscores the broader economic challenges facing Ethiopia, including inflation and the devaluation of its currency.
As the government continues to assess these factors, workers across the country are left waiting for a wage structure that better reflects the current economic reality.
