Low wages stall economic recovery - Issa Aremu

Date: 2018-11-29

Labour Party, LP, governorship candidate in Kwara State, Issa Aremu, has blamed low wages of workers as a major impediment to the nation's economic growth.

Comrade Isa Aremu Aremu, who is also Vice President, IndustriALL Global Union, African Region, in a statement, called on President Muhammadu Buhari to add his presidential weight to push for a speedy legislation on the newly-negotiated minimum wage of N30,000 for Nigerian workers by the National Assembly.

According to him, prompt payment of salaries and urgent wage increase in both the private and public sectors were the smartest and quickest ways to stimulate the nation’s economy. Aremu explained that to "overcome the current economic crisis in Nigeria, workers whose wages buy basic goods and services must not only be paid on time, but must be increased.

"Nigeria cannot overcome recession with the existing miserable pay of workers and pensioners. Wage-led economic recovery is smart economics."

He said Nigerian workers were poorer than their predecessors some 40 years ago when the minimum wage was N125, which was equivalent to $240 in 1981, noting that $240 of 1981 equalled to N70,000 and that in real and nominal terms, workers in 1981 earned more than the current N18,000 minimum wage.

Aremu said: "With Naira devaluation, it has unacceptably fallen to less than $45 in 2018, a quarter of its nominal value in 2016 and less than one percent of its value in 1981, about 40 years ago, worsening income poverty. "For Nigerian economy to recover there must be massive public spending in reconstruction and significantly mass spending by working people through improved wages." He said Central Bank of Nigeria, CBN's communiqué issued after its Momentary Policy Committee, MPC, meeting recently, believed that the proposed increase in the national minimum wage would stimulate output growth due to prolonged weak aggregate demand arising from salary arrears and contractor debt.

He hailed the CBN’s reports on the economy, noting that the reports of National Bureau of Statistics, NBS, have shown that weak demand for goods and services is one factor responsible for low capacity utilisation of many private sector companies.

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