New Minimum Wage Will Not Cause Inflation - NLC
It is not everyone that is happy that Nigerian government want to raise minimum wage.
And this is because of some belief that the raise may result to negative consequences on the economy.
In some quarters, it is strongly believed that any minimum wage increase could fuel inflation.
But the Nigeria Labour Congress, NLC, would believe none of those.
The group has allayed fears that the upward review of the national minimum wage will have negative consequences on the country’s economy.
Mr James Eustace, the Assistant General Secretary of NLC, told reporters in Abuja that the suggestion in some quarters that the increase in the wages of workers would cause inflation, was wrong.
“When you boost the capacity of the average Nigerian worker, in terms of salary, you have boosted its purchasing capacity.
“And when the purchasing capacity is boosted, the entire economic circle of the Nigeria economy will be boosted.
Also Read: Why Raising Minimum Wage May Be A Bad Idea
“An average Nigerian worker has not less than four to five dependants, who live on his or her income.
“So, increasing their take home pay will definitely increase his purchasing power and, will definitely increase their ability to cater for members of his family.
“When purchasing power increases, aggregate demand increases and when aggregate demand increases in economies, ordinarily, supply will increase.”
He added: “If there is more demand than the available products, production will be increased, to meet the demands.
“In that case, supply will increase and what it means is that especially, in terms of consumer goods, there will be more production to meet the demand.
“By so doing, more money is coming into the economy and when more money is coming, through increased production, in terms of manufacturing product, you find out that more employment will be created".
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