From Ighomuaye Lucky, Benin
President of the Nigerian Economic Society (NES), Prof. Adeola Adenikinju, has cautioned the Nigeria Labour Congress (NLC) against setting unrealistic wage benchmarks that may strain employers’ resources, particularly in varying economic contexts across states and sectors in considering living costs and productivity.
He gave the advice while shedding light on the complex considerations involved in setting minimum wage policies, just as he underscored the need for a comprehensive and dynamic approach to address the diverse economic realities faced by workers.
Emphasizing the need for a nuanced approach, Adenikinju highlighted three pivotal factors that should inform the crucial economic policy.
He equally advocated for a band approach rather than a fixed value to accurately reflect the reality faced by Nigerian workers.
Adenikinju who stressed the importance of incorporating changes in average worker productivity since the last minimum wage adjustment, argued that setting the minimum wage should ensure that the marginal productivity of workers meets or exceeds the mandated wage, fostering a fair and equitable employment landscape.
While proposing the evaluation of each state’s net income growth since the last wage revision, or employing other objective metrics, he advocated for a balanced approach to ensure compliance across the board.
Other solutions proffered by the NES president includes a weighted approach, allocating 60% to cost of living, 25% to productivity, and 15% to affordability.
According to him, this would lead to a more equitable and sustainable minimum wage structure, mitigating the drastic fluctuations often witnessed during wage adjustments.
Adenikinju commended the recent appreciation of the naira in the foreign exchange market, attributing it to the proactive measures undertaken by the Central Bank of Nigeria (CBN).
However, he cautioned against the prevailing inflationary pressures, particularly in food prices, advocating for measures to enhance the nation’s production base as a long-term solution to inflationary challenges, while also raising the trajectory of external reserves accretion to further support the naira.