Wages for Dignity: A Call for Fair Wage Policies in Ethiopia

In a period marked by rising inflation and increasing economic uncertainty, the question of fair wages in Ethiopia is more pressing than ever. Addressing this critical issue, the Ethiopian Economics Association (EEA) and FES Ethiopia co-organized a panel discussion under the theme “Wages for Dignity,” bringing together experts, government, employer and employee representatives and other stakeholders to discuss the state of minimum wage policy in the country.

The discussion highlighted a concerning gap between policy and practice. Although Ethiopia’s 2019 labor law mandates the establishment of a Minimum Wage Board, this institution has yet to be implemented. In the absence of such a mechanism, wage-setting continues without a standardized framework, and decisions are often made without access to accurate, up-to-date labor market data.

As the cost of living continues to rise, Ethiopian workers are facing significant wage erosion. Inflation is steadily undermining real incomes, leaving millions unable to meet their basic needs. Panelists stressed that without coordinated policy action, the gap between earnings and living costs will only grow wider threatening not just household stability, but the broader prospects for inclusive economic development.

The panel emphasized several key pillars necessary for addressing the wage crisis:

• Strong governance and legal frameworks to ensure minimum wage policies are designed and implemented effectively.
• Political commitment at the highest levels to prioritize fair wage-setting as a national economic priority.
• Social dialogue and collective bargaining as tools for transparent, participatory, and equitable wage negotiations.
• Stronger trade unions to advocate for workers’ rights and ensure that labor voices are represented in policymaking.

Participants also noted that with hundreds of thousands of young people entering the labor market each year, the urgency of introducing a living wage cannot be overstated. A fair wage is not only a matter of social justice, it is a prerequisite for sustainable economic growth, productivity, and national stability.

The event served as a call to action for all stakeholders, from government institutions to employers and trade unions, to center workers' rights and dignity in Ethiopia’s economic agenda.