Higher wages for workers are likely to increase domestic demand, increase supply and expand local production. It can improve domestic liquidity and create a strong and efficient market capable of attracting foreign and local investors. Traditional economics, which has dominated Nigeria’s policy space since 1999, has roughly run its course, and practitioners, including official economic advisers, have not spread their net enough to appreciate the infinite space of economic science. A dynamic and fresh perspective.
The adoption of supply side economics by Nigeria’s authorities and their official economic advisers has permanently ignored the simple principle of one of the world’s leading economic thinkers, Kenneth Galbraith, that economic policy should never be dogmatized. Such an approach would damage the important element of pragmatism implicit in economic science.
What would a strong wage hike or a demand driven economic outlook for Nigeria’s working people do to the current state of the Nigerian economy? A decline in the local supply of essential and basic agricultural commodities such as food and its by-products has fueled higher prices due to weak demand associated with poor wages.
Due to poor and stagnant wages, many workers are forced to give up buying new modest furniture for their homes and cannot even repair old broken ones. As a result, a carpenter engaged in making new furniture is left idle without production. If the average Nigerian worker earns enough to buy modest new furniture or repair old ones, he will have created a demand for the carpenter, who will ensure that he provides his services. Such an outcome is that a market that is both functional and interactive not only ensures price stability but also creates the conditions for social harmony necessary for peaceful coexistence.
A worker with a stable and adequate wage and income will increase the sustainable demand for food products, thereby expanding production and ensuring stable supply and price stability. It should be said that price stability repels inflation and other market distortions.
An increase in wages for Nigerian workers will not trigger massive capital inflows and displacement of domestic capital, which will and has been creating huge liquidity in the hands of the elite. Nigerian workers with reasonable cash flows from wage hikes may not seek palatial mansions in Dubai and other foreign countries, but may decide to build or buy a modest bungalow, thereby stimulating demand for local artisans, including block moulders, carpenters, welders, local interior decorators. and many others.
With the average worker enjoying a wage hike, demand for local tourism could revive a comatose local tourism industry. Sustained support of the country’s tourism sector will lead to a rise in economic activity; It will employ more workers.
When workers’ wages are increased, there is a tendency to create the liquidity that characterizes an efficient market. The main reason why China and other Asian tigers have become a magnet for foreign investors is the efficient market, which guarantees steady and steady demand for goods and services offered by foreign investors, good returns on investments.
Asia’s legendary city-state, Singapore, known for its meteoric rise, cemented its iconic status as a magnet for foreign investors and an oasis of high social mobility and stability with high wages for workers. Despite political and ideological differences between China and the West, including „disconnection” from the West, the Chinese market of 800 million middle class, the largest in the world, is a premium magnet for European, American and Japanese investors. Expectations in China and refusal to be swayed by the chilling rhetoric of the political establishment.
Chinese and other Asian markets came into the equation by creating a demand/supply balance in which their workers earned enough to augment their domestic market to attract foreign investors. China has never held any investment summit abroad, but has maintained a pragmatic policy environment to promote and build a stable domestic market. With the political rhetoric of „disengagement” from the West on the rise, Chinese officials have formulated a practical policy response called the „dual cycle,” in which Beijing has outlined an emphasis on construction and integration as the domestic market and the international market interact freely. The domestic market is well managed, with any shocks arising from international market disruptions having no effect on domestic upheavals.
No economy can effectively manage the periodic volatility of the international market without substantial stability of the domestic market. Domestic markets cannot long endure the disturbance of wage freezes or low wages for workers, low morale among workers, and corruption, idleness, robbery, terrorism, and other social ills.
In Nigeria, the conventional government response to the issue of wage increases for workers, which is that workers constitute a small fraction of the total population, is unacceptable. It is unacceptable from an economic point of view that the government does not have enough money to finance a strong wage increase.
The reason for public expenditure is to expand wealth arising from the active interaction of demand and supply in an orderly and efficient market. A government awarding itself along with its employees out of proportion to the public expenditure manifested in the lifestyle and various relationships of government employees, is the main cause of the distortion of the domestic market and all its consequences. Social, economic and political upheavals arising from it.
As President Bola Tinubu’s government and representatives of the Nigerian Labor Congress and Trade Union Congress framed the basic or minimum wage for Nigerian workers, it must be made clear that a strong wage increase is in the best interest of the Nigerian economy. . As long as Nigeria’s economy serves the greedy few with the consequences of low productivity and weak demand, let the economy now function to meet the needs of Nigerians and the country will enjoy unhindered growth as a result of integrated and inclusive growth.
The case for a strong wage hike for Nigerian workers is not just moral but socio-economic.
- Mr. Onunaiju can be reached at [email protected]
„Oddany rozwiązywacz problemów. Przyjazny hipsterom praktykant bekonu. Miłośnik kawy. Nieuleczalny introwertyk. Student.