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The Rich Kid
Honestly, I don't think it's a good idea to increase the minimum wage as demanded by the NLC. I've got my reasons please read on!
Let me warn you that all that I write today about the minimum wage are out of common sense reasoning not from some text book knowledge of Economics or something. I didn't take Economics as a subject not even as a secondary school student, yet, I tend to understand the subject so well. Perhaps it could be due to to my 'Nigerianess' I don't know,but,I know a lot about Economics!
The following reasons and many more are why I think it's a very bad idea to increase the minimum wage.




(1) It Doesn't Solve Any Problem
To so many,to be in possession of a lot of money is to solve a lot of problems.While this might seem true,unfortunately,it is not!
The battle for the minimum wage increase,for instance,has been fought and won so many times that you'll wonder why we need to do it again? The answer is simple!
No one got richer from salary increase,it only made people comfortable for just a few weeks and gradually,everyone is back to level zero or lower!

(2) It Increases the Inflation Rate
Just like the civil servants who are hoping to achieve a better living standard once they are paid their new salaries, the business man and woman too,from the small to the medium and Big businesses are no fools either! They,too, also desire a better pay and lifestyle too,they therefore,increase the prices of their goods and services so that what we have in our hands is an equivalent increase in hike of prices which is another way of saying that inflation rate goes up!
When that happens,the civil servant is no better off what he was before the increase in salaries. It's unfortunate,but that's the way it is!

(3) The Naira Suffers!

President Muhammad Buhari is reported to have promised to make the Naira equal in value to the Dollar during his first tenure. People tend to hang on to this funny political campaign promise and the opposition have used it severally to tongue lash him and the APC. It hurts coz I'm a big fan of the President,but, there's nothing I can do about it!I Just have to endure it!
The Demand for the minimum wage is one of the reasons why this feat is almost impossible to achieve.When you increase the Salary, inflation sets in and consequently,with time,the Naira suffers!
Most businesses in Nigeria today are not selling Nigerian made goods but foreign made ones. What I'm trying to make you see is that after the inflation,the business people have more Naira to trade away for more Dollars and according to the popular Demand and Supply law,over time,you'll have to pay more Naira for the Dollar,. That is, the Naira is bound to depreciate against the Dollar as a consequence of minimum wage increase!

(4) The Economy Suffers!
When the Naira suffers,the suffering of the economy is inevitable as the purchasing power of the Naira goes low. What this simply means is that you could be buying the same product you use to buy N50 at a higher price of N70 or N100 as the case may be. When this happens the citizenry begin to grumble again and in desperate need for a solution,the NLC thinks it's time to increase the minimum wage and goes on strike again!

(5) It's a Vicious Cycle!
In case you have not noticed,this is not the first time there's a clamour for increase in minimum wage. Sometimes, it's increased, other times it is not,but,the civil servants do get their take home increased most of the time....though it wouldn't be as exuberant as they had wished, they still get an increase no matter how little.But, what next after the increase? Nothing but a little break after which the problem returns stronger and tougher than ever! Then,we seek for salary increase again and the whole things begins again like a vicious cycle!
My point is that increasing the minimum wage has never served the purpose that it's meant to serve,rather, it has only 'helped' to compound our woes as a people and as a nation.We NEED to stop the vicious cycle...it's not helping at all!
My next post would be on what we can do or a lasting solution to the problem at hand!
Thanks for your time!

The Rich Kid Oct 3 · Comments: 1 · Tags: nigeria, economy, buhari, nlc, minimum wage