NLC Highlights Negative Effects Of New Minimum Wage on Economy
The Nigeria Labour Congress (NLC) has allayed fears that the upward review of the national minimum wage will have negative consequences on the country’s economy. Mr James Eustace, the Assistant General Secretary of NLC, who made this known in an interview with the News Agency of Nigeria (NAN) on Friday 4th of May, 2018 in Abuja.
Eustace said the suggestion in some quarters that the increase in the wages of workers would cause inflation, was wrong. “When you boost the capacity of the average Nigerian worker, in terms of salary you have boosted its purchasing capacity. And when the purchasing capacity is boosted, the entire economic circle of the Nigeria economy will be boosted”.
“An average Nigerian worker has not less than four to five dependents, who live on his or her income. So, increasing their take home pay will definitely increase his purchasing power and, will definitely increase their ability to cater for members of his family. When purchasing power increases, aggregate demand increases and when aggregate demand increases in economies, ordinarily, supply will increase”.
“If there is more demand than the available products, production will be increased, in order to meet the demands. In that case, supply will increase and what it means is that especially, in terms of consumer goods, there will be more production to meet the demand. By so doing, more money is coming into the economy and when more money is coming, through increased production, in terms of manufacturing product, you find out that more employment will be created.”
According to him, if economic consequences in terms of increment of the national minimum wage are considered, it will be more positive than negative. The NLC scribe further explained that the upward review of the national minimum wage would help to meet basic needs of the average Nigerian worker and that inflation could be kept at a single digit.
He commended the Federal Government over its 2018 May Day pledge to prioritize workers’ welfare and stop the delay in payment of salaries and pensions. He described the pledge as a step in the right direction. He, however, urged government to ensure prompt payment of the new minimum wage of N66, 500 as demanded by NLC to achieve set targets in the third quarter of the year.