Assessment of the union’s facilitation effect: On the Ghanaian labour market
Unions play an important role in the labour market. In addition to securing improved working conditions for its members, unions also raise awareness of the wage and non-wage benefits that workers are entitled to, and the most effective ways of accessing these benefits.
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Apart from wage benefits, it is often the case that workers have little or no information about other non-wage benefits contained in their collective agreements, indicating some scope for increased union effort and information dissemination in many sections of the labour market.
Workers’ benefits
Indeed, although benefits of workers examined in this study by two female lecturers of the University of Ghana are statutory, not all workers in the various economic sectors report being entitled to these.
The study that investigated the effect of union presence on workers’ reported access to non-wage benefits in Ghana showed that unions’ facilitation of workers knowledge and awareness of these benefits may be expected to have important implications for workers’ social and economic welfare.
The study, conducted by writers with, approximately 18,000 households, employs a Heckprobit selection model in the analyses with interaction effects and examined the evidence for union facilitation effects among workers in Ghana, using data from the 2012/13 Ghana Living Standards Survey (GLSS).
With union presence being the researchers’ main independent variable, they control for a number of other individual, household, firm and sector characteristics that may determine non-wage benefit entitlements.
Their dependent variables are three forms of statutory non-wage benefits; paid holidays, sick leave and maternity leave and they examined the determinants of three main types of statutory non-wage benefit entitlements.
They also included a number of interaction terms in the regression models, in order to control for potential heterogeneity in union facilitation effects on these dependent variables.
The study examines the determinants of non-wage benefit entitlements in the Ghanaian labour market, with particular interest on the effect of union presence on greater coverage of certain legally-mandated benefits among workers. This is the union ‘facilitation’ effect.
Union presence
In addition to union presence, the study examined other factors that may influence access to these benefits such as sex, age and educational level of workers, as well as looked at urban/rural locality and household poverty status of workers, in addition to whether workers are engaged in the northern or southern parts of the country.
To control for heterogenous effects, the study included interaction terms of union presence and sectors, formality, firm size and gender of workers. The analysis employs a heckprobit regression model in order to control for potential selectivity in the sample.
It established that in general, unions have important facilitation effects among workers in Ghana, that is, unions appear to play an important role in improving workers’ awareness of their work benefits.
It indicates that interaction effects of union presence with various individual, firm and sector characteristics indicated that, first, women have stronger ‘facilitation’ effects, with respect to maternity benefits, compared to men. Secondly, heterogenous union facilitation effects are present among the various economic sectors, and thirdly, unionised workers in smaller firms are less likely to report access to non-wage benefits, compared to unionised workers in larger firms. Finally, workers in the formal sector have a stronger union facilitation effect, compared to workers in the informal sector.
Unions’ presence
The study also established that the presence of unions increases the likelihood of workers reporting coverage of non-wage benefits. The interactions of union presence on the set of individual, firm, sector and formality also presents some interesting findings.
First, unions play a crucial role in raising awareness of women to their maternity leave benefits. Second, stronger facilitation effects are observed among workers in the agricultural and manufacturing sectors.
Although workers in the services sector have the most access to non-wage benefits, marginal effects indicate a smaller scope for union presence in this sector, compared to other sectors with lower compliance, such as the agricultural and manufacturing sectors.
Third, the study found that smaller firms have weaker union facilitation effects, compared to larger firms. Finally, union effects were stronger in the formal, compared to the informal sector. This may be due largely to the non-unionised nature of work in the informal sector, and also as a result of the large degree of non-compliance in this sector.
The study identified other important determinants of non-wage benefit entitlements among workers in Ghana. Older workers were more likely to report access to non-wage benefits, compared to younger workers. Education also increased the probability of access to non-wage benefits.
Workers in the services sector were also more likely to receive non-wage benefits compared to other sectors, and indeed this sector has the highest compliance rate of non-wage benefits in the labour market. The study also found that formal sector workers were more likely to report access to non-wage benefits, compared to informal sector workers, possibly due to the difficulty in enforcement in the latter group of workers.
Workers’ eligibility
The study said workers may be eligible for various forms of non-wage benefits and entitlements - both statutory and non-statutory but may fail to take advantage of these if they are unaware of their existence.
By law, as enshrined in the Labour Act (Act 651), all workers are entitled to paid holidays (Article 20), Sick Leave (Article 24) and Maternity leave for female workers (Article 57).
The study also indicates what areas of the labour market may benefit from increased union presence. Sectors with low compliance such as the agricultural and manufacturing sectors are likely to benefit from the dissemination of union publications, training sessions, among others, to increase worker knowledge and awareness of benefits.
Additionally, it said focus should be paid to the informal economy, where over 80 per cent of all workers in Ghana are concentrated. It is noteworthy that presently, efforts are being made to increase union presence and unionisation rates in the informal sector.
The study also finds that women benefit significantly from union efforts to raise awareness of their maternity leave benefits. Access to these benefits are likely to increase the quality of work for such workers, an important objective of the National Employment Policy (2015) of Ghana, and may also ensure continuity in the labour market as women may find it easier to overcome noted incompatibilities in domestic and labour market responsibilities.
The writers are lecturers at the University of Ghana, Legon.
