The Confederation of Ethiopian Trade Unions (CETU) has issued an urgent call to the government to address the rapidly rising cost of living, warning that the deteriorating purchasing power of the birr is severely impacting the livelihoods of millions of workers, particularly in the public sector.
CETU’s appeal comes amid persistent inflationary pressures, despite recent data showing a decline in Ethiopia’s annual inflation rate to 13.6% in March 2025 from highs of nearly 30% last year. The union argues that the government’s move to liberalize the foreign exchange market in July 2024, while intended to stabilize the economy, has contributed to the weakening of the birr and pushed the cost of essential goods and services to “intolerable” levels.
Among CETU’s top demands is an urgent revision of the outdated income tax brackets. “Many years ago, workers earning 600 birr or less were exempt from income tax, but high inflation has rendered this threshold meaningless,” the confederation stated. CETU is calling for a significant increase in the minimum tax-exempt monthly wage to reflect current inflation, as well as an upward adjustment of the 35% income tax bracket, which currently applies to salaries of 10,900 birr and above.
The union also criticized the long-standing delay in establishing a national wage board, as mandated by Ethiopia’s Employment Proclamation. CETU President Kassahun Folo emphasized that, despite its inclusion in the government’s joint work plan for 2024/25, no tangible progress has been made. “Recognizing the seriousness of the situation, we insist that the regulation be enacted without delay and that the Wage Board be established immediately,” CETU said.
CETU further urged the government to take firm legal action against employers who refuse to recognize unions or engage in practices such as unlawful dismissal, harassment, or the forced relocation of union leaders. The confederation condemned recent reductions in supplementary payments to already inadequate salaries, warning that such cuts would only worsen workers’ financial hardships.
The union also highlighted ongoing challenges to collective bargaining, including employers’ refusal to engage in negotiations or comply with agreements, and reported cases of retaliation against union leaders advocating for employee rights.
Despite recent improvements, inflation remains a pressing concern for Ethiopian workers. The Consumer Price Index rose by 2.7% in March 2025, and food inflation remains elevated at nearly 12%. While the National Bank of Ethiopia has credited tighter monetary policy and supply-side measures for the recent slowdown in inflation, the cost of living continues to outpace wage growth for many households.
CETU argues that low wages and high tax burdens are preventing workers from meeting basic needs. “The living conditions of millions of Ethiopian workers remain of great concern. Inflation continues to erode the purchasing power of wages, and a national minimum wage floor to protect low-income workers remains undetermined,” said Kassahun.
In a previous meeting with Prime Minister Abiy Ahmed, CETU raised key personnel and wage issues, with the Prime Minister instructing relevant ministries to address the concerns. However, the union says that while some progress has been made, many fundamental questions remain unanswered.
CETU maintains that its demands are in line with international standards and practices in comparable African countries, and insists that every Ethiopian has the right to an adequate standard of living, fair wages, and access to health care.
