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Biodun Adedipe, a Nigerian macro-Economist has urged the organised labour to put in consideration the economic implications of the 494,000 new minimum wage demand, labelling it as unproductive and unrealistic.
Adedipe in an interview with ARISE NEWS on Monday, stressed the need for all parties involved to return to the negotiation table, for a better review and realistic conclusion and not to go into the streets for a protest.
Adedipe analysed the broader economic implications, noting that Nigeria’s GDP for the first quarter of the year was 58.8 trillion naira, translating to a daily output of 653 billion naira. He pointed out that if the industrial action continues, the economy could be losing that amount daily.
He also estimated that about 30% of that output could be attributed to the public sector, meaning the economy could lose around 305.9 billion naira daily due to the strike.
“What the Labour is asking is unproductive and unrealistic. It doesn’t pay any of the parties involved and that is the three parties in the negotiation, that is the government, private sector and even the labour that is supposed to be a beneficiary of whatever any of these actors or agents do on a daily basis. So, from that perspective, I would say there is a compelling reason for all the actors to return to the table. Negotiation takes place on the table and not outside the room, on the streets and not even in the media.
“If we look at what the labour is asking for; 494,000 naira as minimum, if you work out the numbers with 1.2 million workers, that gives you a figure of about 5.48 million naira per person, when you multiply by 1.2 million people, you are looking at an annual figure of about 7.114 trillion naira. But that is basic and when you factor in the allowances, you are looking at 9.5 trillion.
“What was our GDP in the first quarter of this year? 58.8 trillion naira. If you pair that on a daily basis, you will be looking at 653 billion naira daily, in terms of output in which case, if we continue in this industrial action, that is how much this economy is hemorrhaging on a daily basis. But you can further break it down and ask what percentage of the value created on a daily basis can be adduced to the public sector, viz-a-viz the private sector? So, you can also ask, if we have all the public sector shutdown by reason of the industrial action, what portion of that will we lose on a daily basis and then to what extent can this also disrupt activities in the private sector? If we assume 30% of what happens in the private sector, that means we could be looking at a figure of almost 305.9 billion naira every day that this economy is losing by reason of this industrial action.”
He further warned of potential job losses and economic instability akin to the 1994-1995 period. He also urged a balanced approach to the wage negotiations to mitigate adverse economic effects.
“For the organised labour, it is more about what can sustain us but at the same time, we want to be sure that all of us still remain in employment. We ask ourselves, 60,000 naira by all means, the government says it is already 100% above the current position, but for the organised private sector, is it something we can afford? Don’t forget, this is just basic. Allowances are heavier in the private sector, in the public sector, allowances are roughly 30% of the basic which accounts for the difference between 7.1 trillion and 9.5 trillion as the government said, which means the issue of affordability becomes very heavy when you consider it because if I can’t afford it, the next thing will be reducing the number of staff. There is a need to consider the implications of pushing the figure so high and what that can do is to return us to where we escaped in 1994-1995. I have played the numbers and I don’t think they can even afford a hundred thousand.”
Chioma Kalu
The post Adedipe: Labour’s Minimum Wage Demands Are Unrealistic, There’s Need To Consider Associated Economic Implications appeared first on Arise News.
