For weeks we have witnessed the struggle for an increment in the Nigerian minimum wage. This situation is multifaceted and it touches on economic, social, and political dimensions. Nigerian philosopher and professor Sophie Oluwole, once stated:
"Justice and fairness are the foundation of any society that wishes to thrive. When the basic needs of the people are ignored, the very fabric of society is at risk"'. Truthfullly, every country must be able to ensure that her citizens can afford basic essentials. Sadly, Nigeria has faced considerable inflation in recent years, causing the cost of living to rise sharply, such that the average Nigerian struggles to provide 2 meals a day for himself, and family. This has made it increasingly difficult for workers to meet basic needs. Many have become homeless, many have died because of their inability to afford good healthcare, and many have dropped out of schools in a bid to survive.
It is being argued that an increment in the minimum wage is essential to help workers keep pace
with these rising costs and maintain a decent standard of living. Many
think that by raising the minimum wage, the government can help reduce the income
inequality gap and improve the living conditions of millions of Nigerians. However,
this line of thought hasn’t taken into consideration the cost-push inflation.
Cost-push inflation is a phenomenon which occurs
as businesses pass on the burden of increased labor costs onto consumers in the
form of higher prices for their products and services.
While a
minimum wage increase seems beneficial for workers, it is a secret invitation to more
hardship. Increasing the minimum wage
can in fact act as an
hinderance to economic growth. It is not
guaranteed that the average standard of living in the country will improve or
that the inflation will reduce. If anything, cost-push inflation is likely to
arise. In addition, this move can
present challenges for businesses, especially small and medium-sized
enterprises (SMEs). These businesses might struggle with the increased labour
costs, which could lead to layoffs, reduced hiring, or even closures. It is
crucial for the government to balance the needs of workers with the potential
impact on businesses, possibly by offering support or subsidies to SMEs.
Someone may argue that increasing
the minimum wage can act as an economic stimulus, for instance, when workers have more disposable income, they are likely to spend more on
goods and services, which can boost local businesses and stimulate economic
growth. This can create a positive cycle of increased demand leading to higher
production and potentially more job opportunities. But have
you thought of the struggles local businesses and regular businesses will face
with dwindling resources and infrastructure? an inconsequential profit margin
and the need to comply with this new payment scale? What about regular inspections and penalties for non-compliance such
businesses may have to deal with? Have you thought about how businesses will
retaliate?
Instead
of advocating for an increase in the minimum wage, why not champion the cause
of equitable compensation for all? We should call for standardized labor compensation
and payment schemes across all three branches of government—the Executive,
Legislative, and Judiciary. If our true aim is to achieve a balance between the
upper, middle, and lower classes, to bridge the income inequality gap, and to enhance living conditions in
society, these are the demands we must make.
