CHAPTER ONE
INTRODUCTION
Background
The late 1970s and early 1980s could be considered as turbulent times in the history of Ghana, as the country saw many regimes come and go. This period also coincided with a severe drought and a major repatriation of Ghanaians from Nigeria. Times were hard and it therefore became necessary for the incumbent government to seek foreign assistance. The IMF and the World Bank eventually became Ghana’s last resort and this gave birth to the Economic Recovery Programme (ERP) followed by Structural Adjustment Programme (SAP). The labour market was not spared in the implementation of the programmes with many public-sector workers, particularly those at the lower echelon of the job ladder hit by layoffs. Many workers who experienced the public- sector retrenchment had to seek solace in the informal sector, which is generally associated with lower earnings and thus compelling them to resort to moonlighting. As noted by Baah-Boateng et al (2013), most of them opted to moonlight to ensure a regular flow of income that might be closer to their previous income before the reform.
Moonlighting or multiple job holding is defined as a situation where an individual maintains a primary employment and engages in additional work also. Shisko and Rostker (1976) define moonlighting as holding two or more jobs or participating in a secondary labour market. From this definition, a moonlighter or a person engaging in moonlighting has a main job (usually full time) and also hold another job or jobs in addition to his full-time employment. Baah-Boateng et al
(2013) argued that in order for a person to be considered as moonlighting, his/her other employment (secondary job or jobs) should be paid employment. Therefore, working for family without pay or engaging in any form of work without receiving a tangible pay cannot be considered as moonlighting. This, they argued was to distinguish moonlighting from other hobbies. Individuals may engage in moonlighting for various reasons including ensuring continuity when the primary job is lost, accumulating relevant skills and overcoming financial difficulties. From the literature, the overarching reason for moonlighting for most individuals is financial constraint or to avoid and escape poverty (Martinez et al (2014), Dickey et al (2011) Baah-Boateng et al (2013)). It is this motive that this study would mostly rely on.
Recovering from this recession, Ghana has chalked some successes in terms of growth as it recorded its highest growth rate of 14% in 2011. The country also attained the status of a lower middle-income country in 2007 (Kwakye, 2012). It would have been expected that all these successes translate into the creation of decent jobs, higher income and a better standard of living for the working population. However, this cannot be said in the case of Ghana. Studies reveal that there is a high rate of vulnerable employment in Ghana, with about seven (7) out of every ten (10) jobs being vulnerable, while only an abysmal one (1) out of five (5) jobs was considered as decent jobs (Baah-Boateng & Ewusi, 2013).
This rising rate of vulnerable employment translates into the problem of working poverty in the Ghanaian labour market. A recent study shows that one (1) out of every five (5) employees in Ghana belong to a poor household (Aryeetey & Baah-Boateng, 2015). The working poverty rate
is pegged at 22.3%, which indicates an improvement of the previous figure of 25.6%. However, the former is still high and requires serious attention.
Working poverty refers to a situation where employed person are living in poor households (Malečeka & Čermákováa, 2015). Poor households may be defined in diverse ways; on the basis of low income, material deprivation or other forms of social exclusion. The US Bureau of Labour Statistics (BLS) defines working poor as people who spent at least twenty-seven (27) weeks in the labour force (working or looking for work) but whose incomes still fell below the official poverty level.
The working poor are normally workers with low wages, mostly engaged in part-time and/or temporary jobs rather than full-time employment, have lower levels of education, mostly live with children below the age of eighteen (18), and the household is likely headed by a female (Klein & Rones, 1989). In her book, No Shame in my Game, Katherine Newman, also argued that, the young, poorly educated and minorities are more likely to be classified as working poor. These workers therefore possess less skills as compared to other workers, arguing from their low level of education indicated above and may probably be concentrated in the informal sector the most.
In situations where employment opportunities are controlled and workers are faced with depleted wages, as in the case of the working poor, they rely on a variety of mechanisms to improve their standard of living. An area that is deficient in terms of the various mechanisms adopted by these poor households is the option of working more than one job to improve their standard of living.
Problem Statement
The availability of jobs in terms of quantity and quality and lack of it, measured by rates of unemployment and joblessness, vulnerable employment rates, incidence of working poverty and income inequality, constitute key indicators of the health of an economy (Aryeetey & Baah- Boateng, 2015). The Ghanaian economy is largely informal and employs majority of the working population but earnings in this sector is relatively low and uncertain as compared to the other sectors. Available statistics indicate that over the years, the informal sector has topped in terms of its ability to absorb a significantly high number of the labour force. In 1992, the informal sector accounted for 85.5% of the total employment and this increased to 88.0% in 2013 (Aryeetey & Baah-Boateng, 2015). Thus, considering the fact that lower earnings are associated with informality of employment, one would not be far from right to argue that lower earnings are one of the labour market challenges in Ghana. This means that, although some people are working, they earn incomes that are low and therefore they are at a risk of poverty as well as their family and dependents.
Essentially, how do low income earners supplement their income from their main economic activity? It is most likely that these low-income workers in a bid to move themselves and their families out of poverty would possibly find other means to supplement their income. Some might turn to friends and neighbors for support. The issue with this option is that it may put the worker further into poverty if not given ample time to finance this loan. A more lasting answer to this can be gained from working more hours or supplementing income by taking on another job. Austin et al (2004) agree with this by indicating low- income families mostly rely on side work (moonlighting) when the need arises. According to Baah-Boateng et al (2013), about 18% of workers in Ghana were engaged in more than one job in 2005/06 dropping from 30% in 1998/99.
Estimate from the GLSS6 of 2013 show that, about 16% of people in employment were engaged in two or more jobs. As Baah-Boateng et al (2013) note, this is generally higher than 10% in UK (Böheim and Taylor, 2004), 6.2% in the US in 1989 and 5% in Brazil in 1999 (ILO, 2004). There are a number of triggers of moonlighting but this study dwells on hour’s constraint or lower earnings motivation to understand the decision of the Ghanaian worker to moonlight.
Research Questions
The study intends to provide answers to the following questions;
- To what extent does moonlighting affect the working poor?
- What are the main characteristics of the working poor and multiple job holders in Ghana?
Objectives of the Study
The fundamental objective of this study is to investigate the effect of multiple job holding on the working poor in Ghana. Specifically, the study would also:
- Ascertain the effect of multiple job holding on the level of poverty of the working poor
- Determine the characteristics of working poor and secondary jobs
: Methodology and Data
For this study, the dependent variable is working poor. That is, whether an individual is considered to be working poor or not. The outcome variable is thus binary. Binary dependent variables are variables with just two possible outcomes (example, yes/no, positive/negative, single/double, among others). In regression analysis, a binary outcome variable, such as the dependent variable for this study, can be analysed using a Probit Model. Therefore, to understand the effect of moonlighting on the working poor in Ghana, a probit regression (model) is employed in this study.
Data used in this study is obtained from the sixth round of the Ghana Living Standard Survey (GLSS 6). The GLSS is a nationwide survey conducted by the Ghana Statistical Service. Round six of the GLSS was conducted from October 2012 through to October 2013. Data from the GLSS 6 survey is suitable for this study because it contains specific information on the personal characteristics of the individuals in the households sampled (example, age, gender, marital status, educational levels, et cetera). Economic activity statuses of individuals are also captured in the survey where the main job characteristics as well as the secondary job features are well captured in the data. Information on the poverty levels of households are also included in the survey which helps to define whether or not an individual worker is considered to be working poor or otherwise.
