Minimum wage is the legal wages the lowest employee should be paid for service rendered either weekly or monthly. The Labour Act of 2004 set the standard for the minimum amount of naira a worker in Nigeria is supposed to make. In 2004 the minimum wage was set to ₦5,500.00 per month. In 2011, the National Minimum Wage Act of 2011 set the minimum wage to ₦18,000.00 per month and now the new National Minimum Wage Act of 2019 will set the Minimum wage to N30,000.00 per month subject to upward review after few years time.
The problem of Nigeria is not lack of resources but lack of effective and efficient Management. Nigeria is nation bless with so many natural resources which full potential utilization of the resources have not been tapped. They are other means of generating revenue to finance the new national Minimum wage other than proposed increment in tax and levels.
The manager of Government resources and policies makers need to step up their planning and control mechanism to accommodate the Nigeria economic reality model for effective decision making.
Appointment of managers should be result based and should not be tribal, religious or ethnic based. Education, experience and level of exposure should be a determinant factor in hiring the best persons to mange government resources and offices. However, relevant educational qualification and upgrade to Nigeria Economic factor should be taken into consideration when key economic decision which may have positive or negative effect on the nation and its citizens as a whole on a long run.
Nigeria law is design in a way to suit the rich and wealthy and deprive the the common man of the dividend of democracy. In this note, Nigeria law need to be review and amended to breach the gap between the rich and the poor.
Economic Effects of the Increase in the National Minimum Wage
The increase in the national minimum wage for workers should be push to further economic development. The increase in the wage of workers will lead to increase in the motivation level of workers and increase their morale as well. In as much as we are looking at these benefits that come with the increase in the wage of workers we should also consider the negative effect associated with it. What ever have advantage must also have disadvantage. The upward review of the national minimum wage is not the "solution to Nigeria problem but a problem to Nigeria solution"
some of the effects includes but not limited to:
1. Increase in Minimum wage from N18,000 to N30,000 will lead to inverse increase in the prize of goods and service. Eg. sachet water selling @10 will have a more increase in the selling price to N20.
2. The increase in the minimum wage will lead to a ridiculous increase in VAT by 100%
3. The increase in the Minimum wage will lead to a mind blowing increase in Company income tax by 100%
4. It will lead to about 150% increase to obtain International passport
5. It will lead to about 150% increase to obtain Driver's license
6. It will lead to about 150% increase to obtain vehicle registration( Number plate, renewal or vehicle papers, learners permit etc)
7. It will lead to about 120% increase to register company at CAC
8. It will lead to about 120% increase to clear your goods at the ports
9. It will lead to about 120% increase to get custom clearance on goods
10. I will lead to about 170% increase in tuition fees in both government and private institutions
11. It will lead to retrenchment of workers by about 35% to break even
12. It will lead to increase in unemployment
13. It will lead to further insecurity as dependency level will increase
14. It will increase increase the dependency ratio from 4/1 to 9/1
15. Shockingly it will increase poverty line
15. It will increase inflation rate from 11% to about 26%
16. It will reduce the purchasing power of our currency as too much money will be needed to acquire little goods or service.
17. It will lead to increase in crime as so many person will lost their jobs and they have bills to take care off
18. It will lead to further increase in corruption
19. It will lead to high cost of living thereby reducing the standard of living of the people
Way forward
Increase in minimum wage is not solution to Nigeria problem, the solution to Nigeria problem is effective and efficient management.
Its not the increase in the quantity of Naira in an employee hand, its the purchasing power and the value of the money that count.
You cannot use old economic theories in a contemporary days and expect to come out with inform decision making model. I celebrate all the old economic theories but some economic theories does not apply in all situations and circumstances as time, Geographical and environmental factor will determine which economic theory to formulate for a particular country or location.
Nigeria do not need increase in wages but working laws and agencies to checkmate and regulate price of goods and services.
With good price legislation and control, the cost of living will be low with a direct proportionate increase in the standard of living.
For National security reasons some solutions and strategies will not be included in this analysis.
The problem of Nigeria is not lack of resources but lack of effective and efficient Management. Nigeria is nation bless with so many natural resources which full potential utilization of the resources have not been tapped. They are other means of generating revenue to finance the new national Minimum wage other than proposed increment in tax and levels.
The manager of Government resources and policies makers need to step up their planning and control mechanism to accommodate the Nigeria economic reality model for effective decision making.
Appointment of managers should be result based and should not be tribal, religious or ethnic based. Education, experience and level of exposure should be a determinant factor in hiring the best persons to mange government resources and offices. However, relevant educational qualification and upgrade to Nigeria Economic factor should be taken into consideration when key economic decision which may have positive or negative effect on the nation and its citizens as a whole on a long run.
Nigeria law is design in a way to suit the rich and wealthy and deprive the the common man of the dividend of democracy. In this note, Nigeria law need to be review and amended to breach the gap between the rich and the poor.
Economic Effects of the Increase in the National Minimum Wage
The increase in the national minimum wage for workers should be push to further economic development. The increase in the wage of workers will lead to increase in the motivation level of workers and increase their morale as well. In as much as we are looking at these benefits that come with the increase in the wage of workers we should also consider the negative effect associated with it. What ever have advantage must also have disadvantage. The upward review of the national minimum wage is not the "solution to Nigeria problem but a problem to Nigeria solution"
some of the effects includes but not limited to:
1. Increase in Minimum wage from N18,000 to N30,000 will lead to inverse increase in the prize of goods and service. Eg. sachet water selling @10 will have a more increase in the selling price to N20.
2. The increase in the minimum wage will lead to a ridiculous increase in VAT by 100%
3. The increase in the Minimum wage will lead to a mind blowing increase in Company income tax by 100%
4. It will lead to about 150% increase to obtain International passport
5. It will lead to about 150% increase to obtain Driver's license
6. It will lead to about 150% increase to obtain vehicle registration( Number plate, renewal or vehicle papers, learners permit etc)
7. It will lead to about 120% increase to register company at CAC
8. It will lead to about 120% increase to clear your goods at the ports
9. It will lead to about 120% increase to get custom clearance on goods
10. I will lead to about 170% increase in tuition fees in both government and private institutions
11. It will lead to retrenchment of workers by about 35% to break even
12. It will lead to increase in unemployment
13. It will lead to further insecurity as dependency level will increase
14. It will increase increase the dependency ratio from 4/1 to 9/1
15. Shockingly it will increase poverty line
15. It will increase inflation rate from 11% to about 26%
16. It will reduce the purchasing power of our currency as too much money will be needed to acquire little goods or service.
17. It will lead to increase in crime as so many person will lost their jobs and they have bills to take care off
18. It will lead to further increase in corruption
19. It will lead to high cost of living thereby reducing the standard of living of the people
Way forward
Increase in minimum wage is not solution to Nigeria problem, the solution to Nigeria problem is effective and efficient management.
Its not the increase in the quantity of Naira in an employee hand, its the purchasing power and the value of the money that count.
You cannot use old economic theories in a contemporary days and expect to come out with inform decision making model. I celebrate all the old economic theories but some economic theories does not apply in all situations and circumstances as time, Geographical and environmental factor will determine which economic theory to formulate for a particular country or location.
Nigeria do not need increase in wages but working laws and agencies to checkmate and regulate price of goods and services.
With good price legislation and control, the cost of living will be low with a direct proportionate increase in the standard of living.
For National security reasons some solutions and strategies will not be included in this analysis.
