In the midst of ongoing discussions about Nigeria’s national minimum wage, Professor Kingsley Moghalu, a prominent political economist and presidential candidate of the Young Progressives Party (YPP), has proposed a minimum wage of N75,000.....Read The Full Story Here ▶
In a statement shared on his official X (formerly Twitter) account on Tuesday, Moghalu emphasised the importance of productivity in the economy as a determinant for wage levels.
Moghalu articulated that Nigeria’s current economic productivity cannot sustain the high minimum wages demanded by labour unions, such as the N400,000 to N500,000 range suggested by the Nigeria Labour Congress (NLC) and Trade Union Congress of Nigeria (TUC).
He argued that while a higher minimum wage is desirable, the nation’s economic output must justify such figures.
“In the debates on national wage in Nigeria, we miss the fundamental point: there is little or no productivity in the economy,” Moghalu wrote.
“If we had a truly productive economy, there is no reason we can’t have the kind of minimum wage of 400 or 500K that Labour wants. But we can’t, because the level of productivity in the economy cannot support it.”
Moghalu emphasised that the minimum wage discussion should extend beyond government salaries, noting that only 2 to 3 million civil servants are employed by the government.
He pointed out that the minimum wage affects not only government salaries but also wages in the private sector and for household staff.
Moghalu highlighted the risk of exacerbating inflation with an excessively high minimum wage, stating that his recommended range of N75,000 to N100,000 is more realistic given the current economic conditions.
“It is even more about what is paid in the private sector, to household staff, and other workers. All things considered, including avoiding a minimum wage that multiplies already ravaging inflation (assuming such a wage can even be paid), I recommend a minimum wage of between N75,000 and N100,000,” he added.
He also questioned the productivity and skill levels of the average Nigerian worker, pointing out that the value they create is crucial to determining sustainable wage levels.
“In fact, speaking about productivity, how productive is an average Nigerian worker? How skilled is he or she, and thus, how much value does he or she create?”
While acknowledging public frustration with the political class, whom he accused of being insensitive to the plight of the masses, Moghalu noted the complexity of the economic factors involved.
I know we are all upset at our insensitive political class who do not care about the masses and only for themselves. But the economics of it all is far more complex.
“Sadly, it is quite obvious that the political will to reduce the waste in governance does not exist,” he concluded.
It is worth noting that NLC and TUC have temporarily suspended their indefinite nationwide strike for one week to allow the Tripartite Committee on New Minimum Wage to conclude negotiations.
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In the debates on national wage in Nigeria we miss the fundamental point: there is little or no productivity in the economy. If we had a truly productive economy there is no reason we can’t have the kind of minimum wage of 400 or 500K that Labour wants. But we can’t, because the
— Kingsley Moghalu OON (@MoghaluKingsley) June 4, 2024