Minimum wage: A lazy approach to an imploding economy by Joseph Edgar

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The way I see this situation is like watching a sinking ship from the shore, with people frantically bailing out and searching for lifeboats to abandon ship.

This perfectly illustrates what is happening in today’s Nigeria.

There has been a major loss of confidence by all parties in the potential to rebuild the economy, leading to everyone jumping ship and trying to grab whatever they can before the mother ship finally sinks.

In my estimation, the push for a higher minimum wage is the wrong approach in the inflationary environment we currently face.

With the food price index swinging like a yo-yo, transport costs up by over 600% almost nationwide, and the cost of living and poverty levels at historic highs, the immediate and urgent response by not only labor but all stakeholders is to ramp up earnings to cover these gaps.

However, this is the worst possible action to take. It’s like pouring fuel on a raging fire. Pumping more money into the hands of workers and the average Nigerian will worsen inflation as more money will chase fewer goods. Since production capacity has not improved, the strengthened demand with no adequate increase in supply will only lead to further price increases, thereby worsening the situation.

But can you blame labour? I say no. Labour has given the government about a year to show a clear resolve in its ability to tackle the economy. This current stance by labour, in my estimation, reflects a huge loss of confidence in the economic handlers.

Do you blame them? I think not. One year later, all indices are worse with no signs of change. The government’s body language is also not helping matters, especially with priorities like changing the national anthem instead of addressing the continuous loss of revenues from opaque policies.

Ideally, the issue of minimum wage should be addressed through top-line policies. Reflate the economy but put in place credible mid-level buffers for the people until the benefits of long-term economic policies begin to take effect.

One year later, no concrete welfare packages in health, transport, food, or education have been implemented. Although the student loan initiative has just started, it has yet to make any appreciable impact.

Corruption remains rampant, taking advantage of institutional leakages and undermining even the sporadic attempts by the government to show progress during its tenure.

The loss of confidence shown by the NLC mirrors the loss of confidence within the government and among the people, evidenced by the increased incidences of corruption and the preference for the dollar as the currency for corrupt practices.

As it stands, everyone is bailing out of the sinking ship. The NLC is not alone, and the situation is very sad as one would have expected the government to at least put us on the path to recovery, even if it couldn’t immediately solve the economic problem.

In conclusion, I don’t have any advice to give the NLC on this matter because they have tried for a year.

My only advice is to the government: be sincere about its capacity or lack thereof to handle this economic problem so that confidence can grow.

It’s a confidence issue, and from what we are seeing, it looks like even the government itself does not have confidence in its ability to move this economy forward.

Sad.

Duke of Shomolu


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