Minimum Wage: Matter Arising

By Tobi Dafe,


The Issue of the minimum wage has been ongoing for quite some time now, as labour unions and the Government are trying to have a common ground in terms of figures.

There is a theory that suggests that if you want to solve a problem, you must first identify the cause accurately.

Now let us for once be realistic on the subject matter. While talks are ongoing on the amount to pay have we also considered the effects of the increment?

Before the government and Labour decide on the amount for an upward review on the minimum wage, I advise that the following should be put into consideration.

1. Price control

The government has to set up a price control system, otherwise there shall be no value added upon the increment if the prices of items are not controlled.

For example, If a man’s salary/wage is increased by X % wish is supposed to increase his purchasing power, and the items and bills increased in proportion to the X% added to his salary/wage, this suggests that the salary increase will only be in figures but not in strength, economically speaking this will result in higher inflation.

2. Private Sector

What will happen to the people in this sector, the higher inflation resulting from the increment could lead to staff reduction and the shutting down of some businesses, as many companies may not be able to pay half the amount of what labour is proposing, so what happens afterward?

Based on the aforesaid, I humbly advise that,

The Government needs to design a system that will regulate bills and prices of items, ensuring strict compliance and sanctions to defaulters. This should also include import duty, tax, tariff, etc

Furthermore, the government also needs to create an enabling environment for the private sector to thrive, bearing in mind that we must first deal with”Make-in Nigeria” to have Made-in-Nigeria”

God bless the Federal Republic of Nigeria.


Tobi Dafe Writes From Warri, Delta State.

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