A Minimum Wage Should be the Bare Minimum

Over the years Nigeria has failed to adopt a national minimum wage. The current recommended minimum wage stands at N18000 per month. This can hardly be considered a living wage (never mind minimum wage) in a country where average annual accommodation rents can be in the region of N500,000 a year. In a country with a high rate of poverty, low life expectancy (45 years), high cost of living and minimal access to credit; wages represent a critical means of sustenance for significant number of people. Almost 75% of all those employed are in federal or state employment. 

The low level of wages has social as well as economic costs for Nigeria. Low wages have created, and in fact entrenched a culture of inequality. Employment is seen as patronage rather than paid labour. There is a societal aspiration to be rich rather than high achieving or successful. Corruption, theft and sexual exploitation have grown exponentially as the wealth gap increases. 

The circulation of money in the  economy is unbalanced. Local businesses operate on very low margins because most people don't have the resources to patronise them. This makes it harder for small and medium sized businesses to make a profit, and therefore there is not enough diversity at the lower end of the economy. The lack of spending power means that Nigeria's high population plays almost no role in boosting economic development. Very few Nigerians are able to save money or invest in any viable way. Ironically political instability and poor security have meant that Nigeria has not been able use the low cost of labour to attract foreign investment in any meaningful way. 

In a country where significant oil and gas resources still generate huge revenue, and where legislators are some of the highest paid in the world (one of the few areas Nigeria leads the world) a refusal to adopt a national minimum wage is not only unfair; it is also negligent. Nigeria will need a thriving workforce in the years to come. Now is the time to start developing the framework to make that happen.