Don’t Use Dollar Exchange Rate To Determine New Minimum Wage

An economics expert, Bismarck Rewane, has cautioned the Nigerian Labour Congress (NLC) against using the United States dollar exchange rate as a benchmark to determine the new minimum wage in the country.

Rewane argued that using the dollar exchange rate as a factor to determine the new minimum wage would put a burden on the private sector, which is a major employer of labour and could inadvertently lead to job losses.

He stated that using the dollar exchange rate as a benchmark without factoring the inflation in the United States would not work.

Melody news reports he made the submission at the Panel session of the 2024 Vanguard Economic Discourse, themed “Reforms in the Era of Global Economic Uncertainties: Whither Nigeria?” which was held in Lagos State.

In his words, “Benchmarking wage demand on dollar exchange rate without taking cognizance of inflation in the United States of America would not work.

“Dollarisation of the minimum wage would put more pressure on the private sector, which is a major employer of labour, and would eventually result in job losses,” he added.

Rewane noted that, if managed properly, an increase in the minimum wage might not necessarily lead to higher inflation in the country.

Melody News reports the government, organized labour and the organized private sector, are currently locked in negotiations to determine the new minimum wage in Nigeria.

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