Economy

Experts Examine Economic Implications of the New Minimum Wage

Since the signing of the thirty thousand naira minimum wage by President Muhammad Buhari early this year and the promise for immediate implementation when the harmonisation is carried out, many Nigerians have continued to express their displeasure on the fall out of the development on the society.

Radio Nigeria correspondent, Wale Oluokun, in this special report x-rayed the implications of the salary increase on the economy and the reactions of some civil servants in Ogun State on the new salary regime.

While Economists agreed that the consequential implications of the new minimum wage which has come to stay is always negative not minding the margin of the increments.

The economic experts were also of the view that the possibility of inflation arising from the increment should be considered. 

However, as the implementation is being awaited from both the federal and the state levels, traders and artisans have already started tailoring their prices to the new wage regime in some parts of Abeokuta, Ogun state capital.

Inflating and repair of vehicle tyres in Abeokuta have suddenly got hiked by 100 percent.

To inflate a tyre now cost 200 naira from the former 100 naira which when questions was raised, no satisfactory answer was provided.

Increase in prices of services and commodities, is synonymous to increase in salary of civil servants.

It is also worth of note that in some years before, petroleum prices sometimes got increased making the consequential increment  to be of no significance.

As the civil servants await the payment of the new wage increase, what are the thoughts of federal and state civil servants about this increment and the difference the increment will make in their lives.

Mr. Adeoye Dacosta a Federal civil servant with National Orientation Agency, Abeokuta while speaking said the labour unions and the government should ensure that power, housing, health and transportation sectors are well managed to make the new salary meaningful to the workers.

Also speaking, another civil servant with the Ogun State government Mr. Babatunde Abatan said state government should comply with the resolution of the labour at the federal level as the workers will buy from the same market.

It is also believed that problems have solutions, what possible step could be taken to prevent possible price increase of services and commodity and measures needed to prevent inflation, A professor of Production and environmental Economics of Federal University of Agriculture, Abeokuta, Professor Idris Ayinde called on the federal government to reenergize the non-formal sector to create more employment opportunities and to also put in place price control mechanism to stabilize prices.

According to him, crisis that will spring up from non-implementation of the new salary could affect the Gross Domestic Product of the nation.

With the concerns from the experts on the undue publicity given to the increase in salary, they also agreed that there may not be significant change in the livelihood patterns of the workers as a cost-push inflation is a possible problem that will affect the new salary regime.

Wale Oluokun

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