“If you scratch beneath the surface, you’ll often find out how work really gets done.”— Aoife O’Brien

1. What Is Office Politics?

If you walk into any company, you will usually see an official organization chart hanging on the wall or listed in the employee handbook. This chart shows who the top boss is, who manages each department, and how reports move up the line. On paper, everything looks clean, logical, and simple. But anyone who has worked in an office for even a few weeks knows that the official picture is only part of the story. Beyond the official chart, there is an unspoken web of relationships, personal trust, and informal influences that dictates how decisions are actually made. This human reality is what people call office politics.

For a long time, business books and management advisors treated office politics like a bad disease. Many workers believed it only meant selfish behavior—like taking credit for someone else’s work, whispering behind backs, or playing dirty games to get a promotion. But in reality, office politics is simply what happens when human beings work together under one roof. Whenever people gather to share budgets, compete for limited job openings, and try to build their careers, personal relationships and differing priorities will naturally come into play.

At its core, office politics is just the process of building connections, explaining ideas, and persuading others to take action. It is the human side of business operating alongside everyday tasks. When used well, political skill helps teams agree on shared goals, solve conflicts, and move important projects forward quickly. When used poorly or selfishly, it creates confusion, breeds distrust, and hurts the performance of the entire company.

2. Why Does Office Politics Happen?

Office politics does not happen by mistake, nor does it mean a company is completely broken. Instead, political behavior grows naturally out of common situations present in almost every organization.

First, resources are always limited. No company has infinite money, endless time, or enough executive titles for everyone. Departments must naturally compete for their share of the company budget, new hires, or high-profile client projects. When rules for sharing resources are not 100% clear, managers must convince senior leaders to support their teams. In these moments, strong personal relationships and executive trust often matter just as much as hard numbers and project proposals.

Second, job roles and targets are often unclear. In complex businesses, it is not always easy to measure exactly who contributed what to a successful project. When employees are not sure how their performance is being evaluated, visibility becomes crucial. People quickly realize that making sure their hard work is seen and appreciated by senior leaders is just as vital as doing the work itself. As a result, employees spend extra effort building their internal reputation.

Third, organizational changes create fear and uncertainty. When a company brings in a new chief executive, merges with another firm, or changes its main strategy, established routines dissolve. During these times of change, employees worry about job security and lost authority. People naturally begin forming alliances, keeping close guard over key information, and protecting their positions until the dust settles.

3. Good Politics vs. Bad Politics

A common mistake made by new workers and technical experts is trying to stay completely neutral and ignoring office politics altogether. They believe that if they simply do good technical work, success will automatically follow. While hard work and high skills are essential, ignoring personal dynamics can leave great ideas completely ignored. It is critical to recognize the difference between helpful influence and harmful behavior.

Helpful influence—often called good organizational awareness—is about bringing people together to achieve common goals. In large companies, great initiatives frequently stall because different departments have different priorities. A worker with strong relationship skills takes time to talk with colleagues before big meetings, listens carefully to their concerns, and frames proposals so that everyone benefits. This kind of thoughtful communication builds trust, removes roadblocks, and helps the business succeed faster.

Harmful behavior, on the other hand, puts personal gain above the health of the team. Examples include hiding important information from teammates, taking sole credit for group work, or spreading rumors to weaken a rival. When harmful politics dominates an office, employees become cautious and defensive. Instead of focusing on customer needs and fresh innovation, workers waste energy writing endless emails to protect themselves from blame.

4. The Four Types of Influence at Work

People often assume that power in a company comes only from formal job titles and salary levels. In practice, however, authority is much broader. Employees build real influence in four distinct ways:

• Title Power: The official authority that comes with a position, such as approving department budgets, signing contracts, or hiring staff.
• Information Power: Having access to key company news, upcoming changes, or financial results before others do. Information holds immense weight in decision-making.
  Connection Power: Being well-connected across different teams. People who bridge gaps between departments—such as connecting sales, legal, and engineering—can solve problems quickly because they know who to call.
• Skill Power: Possessing deep expertise in a critical topic. When senior managers depend on a specific analyst or engineer to solve difficult technical problems, that expert gains high natural influence regardless of their job title.

5. The Hidden Cost of Bad Office Politics

When bad politics runs unchecked by leadership, the entire company suffers a heavy, hidden cost. While this cost does not show up directly on financial statements, it erodes business growth over time in two major ways:

• Flawed Choices: In politically charged offices, project ideas are often judged by who proposed them rather than their actual value. Great ideas from quieter or less-connected employees are ignored, while weak ideas pushed by favorite managers get full funding. Over time, product quality drops and the company loses its competitive edge.
• Loss of Top Talent: High-performing workers want to stay where fair results, creativity, and hard work lead to career growth. When they notice that promotions and bonuses depend on flattery and favoritism instead of true performance, they quietly resign. The company is left mostly with people who care more about playing internal games than doing quality work.

6. How Leaders Can Build a Healthy Workplace

• Company executives and department heads cannot eliminate human politics entirely, but they can set clear rules to ensure workplace dynamics stay positive and fair:
• Set Fair and Clear Promotion Rules: When employees clearly see how performance is measured and how promotions are earned, they do not feel forced to rely on secret favors or backroom deals.
• Reward Cross-Team Cooperation: If managers are rewarded only for their own team’s numbers, they will hoard resources and compete with other departments. Rewarding joint projects encourages leaders to share ideas and work together.
• Encourage Honest and Open Talk: Leaders should actively invite feedback, listen to different opinions, and address problems directly. When management acts with total transparency, toxic political behavior loses its power.

7. Practical Tips for Everyday Professionals

Navigating office politics effectively does not mean changing who you are or sacrificing your values. Instead, it is about being smart and proactive about how you build professional relationships at work. Here are four practical ways to build positive influence every day:

• Focus on Mutual Wins: Whenever you present a new project or ask for help, think about how it benefits the other department too. When people see that you care about their success, they become eager to support your ideas.
• Communicate Early and Often: Never wait for a major meeting to present a big proposal for the very first time. Walk over to key decision-makers beforehand, share your initial thoughts informally, and ask for their advice. This simple step makes people feel included and reduces resistance.
• Build Networks Across Departments: Do not limit your workplace friendships to your immediate team. Take time to get to know colleagues in finance, legal, customer service, and IT. A broad internal network helps you solve unexpected problems much faster.
• Stay Above Gossip: Workplace rumors and negative chatter can ruin reputations quickly. Always remain professional, protect confidential details, and speak respectfully about colleagues even when they are not in the room.

8. Conclusion: Finding the Right Balance

Office politics is not automatically good or bad—it is simply a natural part of working in any group. For individual workers, learning how to build positive relationships, communicate clearly, and present ideas effectively is just as vital as mastering technical tasks. For business leaders, the objective is to build an environment where honesty, hard work, and good results are always recognized and rewarded. When companies combine clear rules with open communication, workplace politics becomes a positive force that drives success for everyone.

Mobile broadband reaches 94 percent of Ethiopians, but only around 25% of Ethiopian’s regularly use the internet. Closing that gap is the next job.

Ethiopians understand what national development looks like. Dam walls, highways and transmission lines running up ridges have been developed, photographed and debated across decades. This is why Ethiopia is developing infrastructure. Most of it is unseen however. Cable, Data Centers, national ID and mobile networks have been established. This infrastructure is now seen as the foundation in the same way roads and power lines are.

The most important figure in this is not how much cable or towers there are. A study by Addis Ababa Science and Technology University published in 2025 looked at the internet universality indicators by UNESCO. The results showed that 94% of the population has access to mobile broadband but only 25% of Ethiopian’s regularly use the internet. This is because having access to a signal is not the same as having service. Many cannot afford handsets and data bundles and have never been taught how to use them.

Starting off

Getting off the ground was challenging. In 2008 only 360,000 people had internet access (0.4% Penetration Rate). However, by 2019 the statistics have changed. Ethiopia has a penetration rate of around 20% with 39 mobile subscribers for every hundred people across a population of over 110 million. Despite having one of the oldest telecom companies in Africa since 1894, Ethiopia’s telecom industry is one of the most advanced in the world according to researchers.

There have been changes. The Ministry of Innovation and Technology in Ethiopia have stated that there has been an increase in internet users across the country. From 17 million to 42 million under the Digital Ethiopia 2025 program. Another source shows that there are 29.5 million internet users in Ethiopia (21.7% of the population in 2025). Comparing the sources shows similar trends in the stats. Both show the same trend and therefore we can see positive trends.

What has been developed?

Many policies and investments have been implemented. Over 800 services are now online according to the government. Data centers have been created. Three Tier-3 data centers have been created through private funding. More data centers will be created in Adama, Hawassa and Bahir Dar. Ethiopia aims to become a regional data center and reduce reliance on foreign facilities.

Opening up the telecom industry is also very important. For many years Ethio Telecom was the only operator. However due to partial privatization and granting Safaricom Ethiopia a license, new companies have appeared. Observers have said the market is becoming more appealing to investors. We can see this in shops and service centers selling new SIMs and data packages.

Public digital infrastructure has been developed. The Digital Ethiopia 2030 strategy highlights the creation of Fayda ID and EthioPay. Mobile money has grown due to Telebirr and M-Pesa (by Ethio Telecom and Safaricom Ethiopia) gaining licenses as Payment Instrument Issuers. During the reform years the volumes of transactions have grown massively, going from millions to 6 billion. The amount of money transferred has also grown from 4 trillion birr to 17.5 trillion birr. According to GSMA research mobile money could contribute between 0.7-2.5percent of GDP in Ethiopia by 2030. This is around 1.5 billion US dollars.

Economically, optimism is not too high. International research has shown that for every 10% increase in broadband access in middle income countries there is an increase in GDP of 1.38%. This shows how broadband can contribute to the increase in GDP more than other ICT services. By 2025 Ethiopia’s digital economy will be 5.3% of the country’s GDP according to the World Bank. The average across Africa will be 5.2% so this is just the percentage of GDP.

Issues with Connectivity

Ethiopia are honest about the issues which is great. This means money goes towards solving the real issues.

According to the AASTU report 79% of residents do not have access. This shows that although there is coverage, this is not enough. Also key issues such as affordability, digital skills and device access are ignored. Quality is a big issue. In 2025, Ethiopia’s median fixed broadband download speeds were 9 Mbps compared to nearly 79Mbps globally.

Gender and rural/urban divide are also an issue. Generally rural women have less phones (as claimed by some experts) meaning there is a divide in connectivity. Complex SIM card registration also doesn’t help. Imagine a woman from an agricultural area who is in 4G coverage but does not have a phone. She asks for documents which she doesn’t have.

Data governance is currently being developed. Experts believe that without clear rules for the sector and transparency in the actions of state bodies, businesses and individuals there will always be issues when using services. The lack of data protection systems, despite the increase in use of digital services, is still a large issue according to UNESCO.

Four Key Issues

Affordability and digital skills should be taken seriously. I can see how important they are.

Make affordability and digital skills a priority. I understand how important they are in everyday life. Closing the gap in affordability of devices, reducing data cost and providing useful training will help close the gap better than adding more towers. Only 25% of people actually use the signals despite 94% coverage.

Address the gender issue. We cannot let anyone fall behind. Funding programmes for women, simplifying registrations and providing digital skills training will address this known issue rather than waiting for the network to get to rural areas.

Provide quality. Speed is just as important as coverage. If speeds aren’t improved then Ethiopia’s digital economy will be nothing but on paper.

Create rules about data protection. Trust is extremely important in any digital services sectors. The more Fayda and EthioPay look at peoples’ personal data the more clear and enforceable rules will determine whether people trust them and use their services. These will be closely aligned to global rules.

The Next Chapter

Ethiopia’s leaders have decided. They believe digital connectivity should be seen as the same as roads, electricity and clean water for the positive impact on the growth of the nation. Clearly they are correct. 20 years ago Ethiopia was almost cut off. Millions of people across the country are now connected to the internet. Mobile transactions are in trillions of Birr each year. However this will not be an easy next step. Whereas the first stage focused mainly on getting people connected, the next stage will ensure all Ethiopians have the opportunity to use the internet.

In the late eighteenth century, deep in the forests of southern France, hunters captured a young, naked boy roaming entirely wild among beasts. Known to history as Victor of Aveyron, this child had grown up detached from human society, surviving without speech, culture, or communal touch. When he was brought into civilization, well-meaning educators and physicians attempted to rescue him, hoping to teach him the ways of humankind. But despite years of patient, heroic rehabilitation, Victor could never fully integrate. He remained profoundly alienated, unable to master language, process abstract thought, or navigate the complex currents of human society.

Victor’s tragic fate is not merely an isolated historical anomaly; it is a stark, haunting reminder of a fundamental biological truth: human beings are not merely social by choice—we are hardwired, from our neurobiology to our survival instincts, for communal life.

The Lifeblood of the Mind: Communication, Brain Health, and Longevity

We often treat human communication as a practical tool used simply to exchange information, negotiate tasks, or express daily preferences. Sustained interpersonal communication and rich social life are the absolute lifeblood of cognitive vitality.

Modern neuroscience has revealed that active, deep communication is one of the most complex workouts the human brain can perform. When we engage in meaningful dialogue, our brains are simultaneously decoding linguistic symbols, interpreting micro-expressions, regulating emotional responses, and anticipating another person’s perspective in real time. This continuous cognitive friction builds what neuroscientists call cognitive reserve—the brain’s structural resilience and ability to route around neurological damage.

Extensive epidemiological research demonstrates that individuals who maintain robust social networks and engage in regular, intellectually stimulating communication enjoy markedly lower rates of stress, sharper cognitive performance well into old age, and a significantly delayed onset of neurodegenerative diseases like Alzheimer’s and dementia. Conversely, chronic isolation acts as an accelerant for cognitive decay. Just as Victor’s brain failed to wire properly without early human contact, an adult brain deprived of deep interpersonal discourse slowly begins to wither. We require communicative connection to keep our minds alive, coherent, and resilient.

 The Paradox of Proximity: Why Miscommunication Happens

Given that we are biologically designed for connection, it remains a profound paradox why two people who speak the same language, share good intentions, and act in a spirit of cooperation so often end up struggling to understand each other. Ironical as it may seem, physical or emotional proximity often exacerbates this divide: closeness breeds the illusion of transparency, convincing us that those nearest to us must naturally view the world through our exact lens. When that assumption inevitably shatters, miscommunication breeds deep frustration, fracturing families, marriages, and lifelong relationships.

Focusing on the causes of these breakdowns, one of the most common culprits is unexamined semantic assumption. This occurs when two people further their dialogue assuming both share the exact same definition of a particular word or concept, failing to account for the background baggage each person brings to the table. For instance, when two individuals discuss “marriage,” their understanding is often limited to the intimate lens of their own upbringing. If one witnessed a toxic, broken dynamic while the other experienced a blooming partnership, their internal definitions diverge wildly, sparking immediate friction.

Beyond semantics, interpersonal conflict is frequently driven by subconscious trauma and psychological undercurrents. Consider the chilling account of a man who faced severe childhood abuse because his father irrationally blamed him for his mother’s death in childbirth. Growing up under constant brutality, his definition of a “father” became inextricably linked with terror, trauma, and helplessness. For someone bearing that history, discussing a “loving and caring dad” is entirely foreign and deeply triggering. A traumatized mind may even subconsciously provoke conflictual conversations to protect itself from ancient childhood wounds.

Finally, friction arises from hidden cultural currents. Even when two people speak the same language, divergent cultural backgrounds create colliding expectations. Consider two individuals from the same nation—one who spent decades abroad as a diaspora  and another rooted entirely in traditional local customs. In marital relations within diaspora communities, for example, a husband may expect his wife to fulfill traditional domestic roles through a conventional lens, while his partner operates under a modern, Westernized framework of partnership. If these unspoken cultural assumptions remain unmasked, resolving the impasse becomes an uphill battle.

 How to Bridge the Unseen Gap

Recognizing that miscommunication is rarely just about superficial vocabulary fundamentally changes how we approach resolution. If the true roots of interpersonal conflict are buried beneath unspoken personal history, subconscious trauma, and divergent cultural conditioning, superficial fixes will never suffice. Overcoming these invisible barriers requires a deliberate, uncompromising commitment to intentionality, curiosity, and emotional discipline.

The first step in this journey is a conscious shift from lazy assumption to explicit definition. Whenever a dialogue touches on high-stakes, deeply loaded concepts—such as marriage, respect, commitment, or success—we must abandon the illusion that our vocabulary is universally shared. Instead of reacting with frustration when a term rubs us the wrong way, we must cultivate the courage to pause and unpack it. Making the implicit explicit disarms hidden assumptions before they can ignite an unnecessary fire.

“When you use that word, what does it look like in your actual experience?”

Beyond words, we must learn to untangle our present-day interactions from the ghosts of past trauma and cultural conditioning. As demonstrated by the scars of childhood abuse or the clashing expectations of diaspora life, emotional triggers often drag old wounds into a completely unrelated current debate. This demands rigorous metacognition—the discipline of stepping back to examine our own internal weather. When a minor disagreement provokes a disproportionately fierce emotional reaction, we must interrogate our own motives: Am I truly responding to the person sitting across from me right now, or am I violently reacting to an old script, an unhealed wound, or an unexamined cultural reflex? Recognizing these subconscious defense mechanisms allows us to lay down our emotional armor and respond with rational, empathetic presence instead of reflexive hostility.

Ultimately, bridging the gap of miscommunication calls for the cultivation of epistemic humility—the profound acceptance that two people can look at the exact same reality through completely different lenses and both remain “right” according to the architecture of their individual worlds. We must approach dialogue not as a courtroom trial to be won or a debate to be dominated, but as a mutual excavation project. By honoring the validity of another person’s internal archive, even when it violently contradicts our own ,we transcend the limitations of language and construct the structural foundation for a safe psychological sanctuary where true human understanding can finally take root.

The famous motivational speaker and author Stephen Covey once wrote that we usually expect others to understand us before we seek to understand them. However, this communication paradigm is problematic because it assumes our perspective is superior to our listener’s. This condescending expectation often drags conversations into friction and misunderstanding. Instead, we should always aim to gain a deeper understanding of the motives, aspirations, and both the visible and invisible expectations people bring to a conversation.

Consider a common scenario where a husband comes home late from work and his wife angrily exclaims, “You never care about me, you only think about yourself!” To which the husband retorts, “You never understand how stressful my work is, you always complain!” Both individuals expect to be understood, but neither makes an effort to understand the other. The wife wants her husband to recognize her loneliness and concern, while the husband wants his wife to acknowledge his stress and responsibilities.

If the wife had instead asked, “Was work particularly difficult today?” and the husband had asked, “Were you worried when I came home late?”, they might have connected through mutual understanding before driving each other away with judgment. The underlying lesson is simple yet profound: we frequently demand empathy from others while failing to offer empathy ourselves.

Interpersonal communication is a biological and social necessity for human beings. While conflict, misunderstanding, and hurt might tempt us to retreat into our shells, abandoning human communication entirely is virtually impossible and unsustainable. Instead, by learning from both our mistakes and our successes, we should strive to become competent communicators to enhance our mental health, foster a healthy social life, and articulate our ideas effectively in our professional lives.

When Kenyan President William Ruto recently announced a proposal to exempt workers earning up to KSh 32,333 a month from Pay As You Earn (PAYE) income tax, he raised an important question for governments across the region: how can tax policy help low-income workers cope with rising living costs?

The proposal, which is still subject to the legislative process, is intended to leave more money in the pockets of workers earning modest incomes. For households struggling to cover food, housing, transport and other essential expenses, even a relatively small increase in take-home pay can make a difference.

Ethiopia has a similar question to consider. How effectively does its tax system protect low-income workers, and what further measures are needed to ensure that people who work can meet their basic needs?

Kenya’s proposal offers a useful starting point for this discussion. But the lesson is not simply that Ethiopia should copy another country’s tax policy. It is that tax relief should be assessed in relation to workers’ actual earnings, their tax obligations and the cost of living. Reducing taxes can help, but the benefits depend on who receives the relief and whether the additional income is sufficient to improve household welfare.

What Kenya’s Proposal Means for Ethiopia

Kenya’s proposed exemption would raise the amount of monthly employment income that workers can earn before paying PAYE tax to KSh 32,333. Under the existing system, the first KSh 24,000 of monthly income is subject to a 10 per cent tax rate, alongside a personal relief arrangement. The proposed changes would alter this treatment, although their final impact will depend on the legislation adopted.

The proposal reflects a policy choice to reduce the tax burden on lower-income earners while adjusting the wider tax structure. Its significance lies in the recognition that taxation affects workers’ disposable income and their ability to meet household expenses.

Ethiopia has also revised its employment-income tax system. Income Tax Amendment Proclamation No. 1395/2025 increased the monthly employment-income tax-exempt threshold from 600 birr to 2,000 birr and adjusted the income-tax brackets.

This change provides tax relief to workers whose earnings fall within the revised brackets. However, its effect must be considered against the level of wages and the cost of essential goods and services. A higher tax-free threshold can increase take-home pay for workers who would otherwise pay tax on the exempt portion of their earnings. Yet the benefit may remain limited when wages are low and household expenses are high.

The relevant question, therefore, is not simply whether Ethiopia has introduced tax relief. It is whether the relief is sufficient to protect workers with modest incomes and whether the broader tax system distributes the burden fairly.

Kenya’s proposal provides an opportunity for Ethiopian policymakers, trade unions and researchers to examine these questions more closely.

Tax Relief Can Help, but Who Benefits?

Tax relief is an important policy instrument because it allows eligible workers to retain a greater share of their earnings. When the cost of living rises, reducing the tax burden can provide some immediate breathing space for households.

However, the benefits are not the same for everyone.

Workers who pay income tax may gain from a higher tax-exempt threshold or lower tax liability. But workers whose earnings are already below the taxable threshold may receive no direct benefit from a further exemption. They may be among those facing the greatest financial difficulties, yet changes to income tax alone may do little to improve their circumstances.

This distinction matters for Ethiopia, where workers’ earnings vary considerably across sectors and occupations. A tax measure that benefits formal-sector employees who pay income tax may not directly assist workers who earn too little to be taxed. It may also fail to reach people in informal employment who do not benefit from the same arrangements as formally employed workers.

Tax policy should therefore be assessed in terms of its actual impact on different income groups. Policymakers need to consider how many workers benefit, how much additional income they retain and whether that gain meaningfully improves their capacity to meet essential expenses.

The aim should be to design a tax system that provides meaningful relief to low-income earners without overlooking those whose earnings are already too low to generate a direct tax benefit.

Lower Prices Do Not Always Mean Greater Affordability

The discussion of tax relief also connects to a wider question about how Ethiopia measures the cost of living.

Government officials have at times highlighted Ethiopia’s relatively low prices for selected services, including electricity and water, as well as measures to subsidize fuel. Such interventions can reduce household expenses and should be recognised when assessing economic policy.

However, a comparison of prices alone does not provide a complete picture of affordability.

A litre of fuel may cost less in Ethiopia than in a neighbouring country. But if workers in that country earn substantially more, they may find it easier to afford the same quantity of fuel. What matters is not only the price of a product, but also the income available to purchase it.

One way to assess this relationship is to calculate how many hours a worker must work to afford a litre of fuel or another essential item. This approach can provide a more meaningful comparison of purchasing power than nominal prices alone.

Ethiopia could use this method to examine the relationship between wages and the prices of fuel, electricity, transport, food and other necessities. Such an assessment would require reliable, comparable data on prices, earnings and working hours.

The point is not to dismiss subsidies or lower utility tariffs. These measures can provide genuine relief. Rather, their benefits should be evaluated alongside workers’ earnings and the overall cost of living.

The same principle applies to taxation. A reduction in tax liability may increase take-home pay, but its practical value depends on the amount saved and the expenses that income must cover.

Economic protection should be assessed not only by how much essential goods cost, but also by whether workers can afford them with the income they earn.

Tax Relief Cannot Replace Fair Wages

Tax relief and fair wages serve different purposes. Tax relief reduces the amount of income tax eligible workers pay, while wage policy addresses the level of earnings workers receive for their labour.

For a worker who pays income tax, a reduction in tax can increase disposable income. But if the wage itself is inadequate, the additional amount may not be enough to cover basic expenses. For a worker who pays no income tax because their earnings are already below the taxable threshold, further tax relief may provide no direct financial gain at all.

This is why tax reform should be considered alongside wage policy. Improving take-home pay is valuable, but it cannot by itself guarantee that workers earn enough to maintain a reasonable standard of living.

Ethiopia’s Labour Proclamation No. 1156/2019 provides for the establishment of a Wage Board comprising government, employer and trade union representatives, together with other relevant stakeholders. The Board is intended to help determine and periodically revise minimum wages based on economic development, labour-market conditions and other considerations.

Making this mechanism operational would provide an institutional foundation for evidence-based minimum-wage determination. It would also create a formal process through which workers’ needs, employers’ circumstances and broader economic conditions could be considered.

Tax relief and a national minimum-wage system should not be viewed as competing policies. One concerns the share of earnings workers retain after tax; the other concerns the minimum level of remuneration covered workers should receive. Both can contribute to improving living standards when designed and implemented effectively.

Building a Fairer and More Effective Policy

For Ethiopia, the policy challenge is to combine tax reform with measures that address low earnings and the cost of living.

First, the government should assess the effects of the revised employment-income tax thresholds on workers across different income groups. Such an assessment should examine the amount of tax saved, the number of workers who benefit and the extent to which the relief improves disposable income.

Second, tax policy should be considered alongside reliable evidence on household expenditure and purchasing power. Comparing Ethiopia’s prices with those of other countries can be informative, but comparisons should also take account of differences in wages and income. This would help policymakers determine whether lower nominal prices translate into meaningful affordability for workers.

Third, the Wage Board provided for in the Labour Proclamation should be operationalised, with meaningful participation by government, employers and trade unions. Its work should be based on transparent criteria, credible economic and household data, regular reviews and effective enforcement.

Finally, social dialogue should play a central role in shaping these policies. Trade unions can contribute evidence about workers’ earnings and living costs, while employers can provide information about productivity, employment and the capacity of different sectors to pay. Government should use this engagement to develop policies that protect workers without ignoring the wider economic conditions in which businesses operate.

These measures would help move the debate beyond isolated tax changes towards a more comprehensive approach to workers’ economic security.

Beyond Tax Cuts: Protecting Workers’ Purchasing Power

Kenya’s proposed income-tax exemption is a timely reminder that tax policy can play an important role in protecting low-income workers. By allowing eligible employees to retain more of their earnings, governments can help households manage their expenses.

But tax relief is not a complete solution to low wages or the rising cost of living. Its benefits depend on workers’ tax liabilities, the amount of income they earn and the prices they face. Those who already pay little or no income tax may need other forms of support, including fairer wages and stronger labour protections.

Ethiopia has already revised its employment-income tax thresholds. The next step is to assess the practical effects of that reform while strengthening the policies and institutions needed to improve workers’ living standards.

That means looking beyond nominal prices and tax rates to the relationship between earnings and essential expenses. It also means turning the legal provision for a Wage Board into a functioning mechanism for evidence-based minimum-wage determination.

The objective should not be to choose between tax relief and fair wages. It should be to ensure that workers retain a reasonable share of their earnings, receive fair remuneration for their labour and can afford the necessities of life.

Tax relief can put more money in workers’ pockets. Fair wages and sound economic policies must help ensure that the money they earn is enough to live on.