Reducing Income Inequality: Trade Unions Role and Views of the World Bank

1. Reducing Income Inequality: Trade Unions Role and Views of the World Bank Ishaque Otoo Ghana Trades Union Congress

2. outline • Inequality in Ghana • Informal employment • Unions and the informal sector • Challenges to union organisation in the informal sector • The way forward

3. Income Inequality in Ghana • High and rising income inequality • Income inequality and poverty reduction – hampering efforts at reducing poverty • Government effort at reducing income inequality • Dealing with the rising inequality – growth creates opportunity for the poor to make use of their most important assert – their labour

4. Informal Employment in Ghana • The size of the informal sector – 86% of total workforce, higher than it was in 2000 • Why a large informal sector – low labour demand in the formal sector; inability of the formal private sector to absorb retrenched workers; absence of income support programmes; • Characteristics of the informal sector – low wage, poor working conditions; health and safety deficits; lack of social protection

5. Unions and the informal sector • The need to organise in the informal sector: • Most retrenched workers were union members • large number of workers; poor working conditions – wage , health & safety, social protection etc • Boosting the membership of the unions – • public sector could not be relied upon for union membership; • the falling share of formal private sector in total employment; • the informal sector as the only source of membership

6. Unions in the informal sector • Adopted a policy on organising in the informal sector – 1996 • The Ghana Private Road Transport Union (GPRTU); • The General Agricultural workers union (GAWU) • The Timber and Woodworkers’ Union (TWU) • Makola Traders Union (market women), Madina Traders Union – associate membership of TUC • The social enterprises project supported by the ILO

7. Challenges to Union Organisation in the informal sector • Irregular nature of employment in the sector – hampers effective organization • Financial constraints • Negative attitude of government and its agencies towards the sector • Failure of unions to come up effective modes of organisation in the sector

8. The Way forward • Defining effective organising mechanisms • Ghana TUC hosted International Conference on the Informal Economy (2006); • Ghana TUC is also coordinating a 4-country research on identifying best practices in organising in the informal sector • Continue to advocate for policies that promote employment in the formal sector