This document discusses the issue of low wages across different sectors in Nigeria. It outlines several objectives, including raising awareness of low wages, highlighting the effects, and proposing remedies. Some key effects of low wages mentioned are brain drain, demotivation, under-utilization of resources, and decreased living standards. Potential remedies suggested include consistent review of minimum wage laws to match inflation, compelling above-minimum pay to meet cost of living, tax reforms, and employee development programs. Overall the document analyzes the challenges posed by low compensation in Nigeria and possibilities for improving wage structures.
2. LOW WAGES ACROSS SECTORAL BOUNDARIES
INTRODUCTION
Firstly,because of limitations and specification,this studywas limited
to the Nigerian sphere.The handlingof wages for employees in Nigeria,
both in the publicand private sectors, have so far been porous and filled
with mismanagement offunds and abysmal rate in which corruption is
rooted in the countryas a whole. It is also very surprisingthat with the
relativelyhigh cost of living in the countryis being matched by low wage
structures across all sectors of the economy,compare with other nations
with lower cost of livingbut rewarding its workforce with significantly
better wage structures.
OBJECTIVES
The major objectives of this study are to;
Raise the issue of low wages across the country
Highlights the resultingeffects of low wage structure and;
Show possible remedies that can bring a fairer wage structure
for the employees
Then issues of lowwages in Nigeria have been highlighted and
debated since the pre-independence era.With various and frequent
changes in government and policies,the Nigerian labourforce has been
clamouringfor better and improved salarystructure that will trulyreflect
theireffectiveness.
Wages should not onlybe adequate but theymust also show some
element of equity,this is particularlytrue from the point of the employees.
Anythingshort of a fair and equitable wage or reward can quicklyattract
the wrath of employees in an economysuch as Nigeria. Formany Nigerian
3. employees,wages or salaries are highlycritical issues. Theyare decisive
because without them in sufficient quantities,life becomes extremely
precarious for the worker and members of his/her family. As direct
financial rewards,wages and salaries are the most emphasized bythe
employees,thus they sort of take a centre stage in the scheme of things as
far as rewards for work is concerned. For manya Nigerian employee, wage
or salaryis the main thing. It is thus against this background that the need
for a dynamic,intelligent and foresightful wage and salaryadministration
cannot be overemphasized,particularlyfor an emerging economy like
Nigeria in the era of globalization.
Institutions orcompanies that seek to attract and retain highly
productiveand efficient employees cannot shy away from facing the
challenges posed by the need to pay wages adequatelyin a competitive
environment.
Nwachukwu (2000), and Ngu, (2005) haveidentified the key features
or characteristics of good salaryor wages as follows:
1. The wage rates that prevail in the local market and in the industry.
The main purpose here is that it will ensure that the companyremains
competitive.
2. The internal alignment ofwages to ensure equity.
3. Recognizingfor individualPerformance. Although two individual
workers may have identical qualification and/orexperience, one may earn
higher than the other due to his superiorperformance.
4. Takingcare of IndividualIncentives.That is,incentives that:
(a) are easy to administer;
(b) whose results reflect the efforts of the individual;
(c) make the computation ofreward easy;
(d) equate reward with the effort expected; and
4. (e) leave the factors necessary for the attainment ofthe objects in the
control of the employees.
It is argued that government employees are generallyless motivated
by wages than theirprivate counter parts. But it has also been discovered
that the issue of low wages cuts across sectoral boundaries and it’s isn’t
limited.The issue has been found out to be as a result of inconsistent
government’s policies,appointment ofincompetent politicians into
sensitiveoffices and seeminglyweak central labourorganization.
EFFECTS OF LOW WAGES IN NIGERIA
The effects of low wages have been discovered to have bitingnegative
and positiveeffects which we shall discuss as broadlyas possible.
1. BRAINDRAIN
Low wage administration in Nigeria havebeen highlighted to be the
majorreason for the ugly trend of the country’s best brains leavingthe
shores of the countryto countries that offer more reasonable and fair
salarystructures.
In a recent report,the European Commissionpublished a report which
pointed out that there are more Nigerian professionalsworking in Europe
than in Nigeria. Reasons aren’t farfetched because European organizations
offer better and fairer wage structure that complements,fully,the work
done by theiremployees.
2. DEMOTIVATION
Another bitingnegativeeffect of low wages across all sectors, publicly
or privatelyowned,is the dwindlingdedication ofemployees.This is
basicallydown to the fact that the employees’feeling of not being
rewarded fair enough.
5. Demotivation has been found to be the foundation foranother effect
of low wages in Nigeria and this is;
3. UNDER-UTILIZATION OF RESOURCES
Due to the aforementionedeffect, employees tend to put in minimal
efforts towards achievingorganizational goals and this has had and still
havingits effect on the economy at large. It has turned manpower
resources, raw materials and other factors of productioninto obsoleteand
unusable instruments which should ordinarilyhavebeen used to boost the
nation’s economy.
4. DECREASE IN STANDARD OF LIVING
Due to the low wages administration in Nigeria,the working
population has had to contend with economichardship which is being
caused by high inflation rates without correspondingincrease in salaries
being administered.
5. CORRUPTION
Corruption in the labourforce has been discussed extensivelyas being
the main source of Nigeria’s predicament,which is justifiable to some
extent but it hasn’t been noted that it is as a result of salaries being
unjust and in some situation,inconsistence.Corruption can also
extend to faults of the designated administratorswho should
ordinarilybe designingforbetter paypackages.
6. LOW CIRCULAR FLOW OF INCOME
Low wages have had its effects on the spendingcapacityof the
working populace. This has also affected and reduced,drasticallythe
savingpower of the employees
As much as there are countless effects of low wages across all sphere
in Nigeria,there are known remedies which must be taken to end the
6. trend of low dedication to work, issues of braindrain, lowpurchasing
power, inferioritycomplex etc. these shall be discussed in detailed
information below;
REMEDIES TO THE ISSUE OF LOW WAGES ACROSS SECTORAL
BOUNDARIES
1. Consistent reviews of the minimum wage law. Inasmuch as this law
has been reviewed countless times,efforts should be put in place to
ensure that the least pay must be able to motivate the lowest cadre
of employees because only dedicated workers can guarantee
optimum usage of resources which will in turn boost the economyas
a whole.
2. Also,the review of the minimum wage alone should be limited but
should be done in consistent with the inflation rate as frequent as
possible
3. Organizations shouldbe compelled bythe regulatingauthorities to
pay abovethe lowest cost of living in the country.
4. Also,more can be done too if government and private sector
organizations adopt responsible procurement practices.
5. Employees should be taxed accordingto theirearnings.It has been
discovered many times that government’s taxation systems favour
onlythe rich and neglect the hardship ofthe less privileged
workforce.
6. Organizations,both publiclyand privatelyowned,shouldencourage
employee development bysponsoringeducationaland skills
advancement.
7. 7. While the issue of brain drain won’t vanish overnight,efforts should
be made by establishedorganizations to recruit and retain the best
brains of the country.
8. REFRENCES:
1. David Coats: The National Minimum Wage; Retrospect And
Prospect; 2005
2. Abiodun O. Folawewo: Macroeconomic Effects Of Minimum
Wage In Nigeria: A General EquilibriumAnalysis, 2007
3. John I. Agburu: Recent Trends in Wage and Salary
Administration in Nigeria: A Synopsis on Theoretical and
Empirical Challenges
4. Fapohunda,Tinuke. M ,PhD; Atiku, Sulaiman Olusegun and
Lawal, Ibrahim Olanrewaju: Minimum Wage Implementation
And Management In A Post-Recession Economy: The Nigerian
Experience
5. Lydia Banks: Motivation in your workplace, inspiring your
employees (1997)
6. Akekere Jonah and Yousuo, P.O.J: An Empirical Analysis of Wage
Differentials Among Public Servants in Nigeria (2014)
