Different schools of thought have argued about the effect of wage increase for public sector workers, the economy and the country. While one school believes that wage increase is good but triggers another wave of inflation, as experiences have often shown; another believes that it rather helps boost consumer confidence and capable of triggering a boom in the economy. For those in the later school, a modest increase in the wages or salaries of public sector workers would not be a bad idea after almost eight years of the Buhari administration.
According to them, it is the myth of neoclassical economics, that higher wages lead to inflation; and that has compounded the thinking on the relationship between wages and inflation. They insist it is a ridiculous myth that should be consigned to the dustbin of economic history, as they note that the country’s economy at the moment is experiencing runaway inflation and exorbitant service charges, while wages across the public sector remain abysmally low.
There is a near consensus, however, that instead of dissipating much energy on whether or not wage increase generates inflationary trends, a more moral approach would be to look into the unrealistic perks and salaries of high state functionaries. A much fairer reward system should rather be adopted. Also, whenever there is need to encourage wage increase, it should be made conditional and the capacity of the sub-national entities to pay must be taken into consideration.
At the root of the various arguments has been the issue of revenue, but there are so many leakages in government such that even the revenue that trickles in, is frittered away on avoidable subheads and corrupt practices. Government should address the issue of systemic corruption in the public service. It should exorcise the ghost workers syndrome in the civil service. Those who are not working should be relieved of their duties or trained and redeployed where they can be useful. A lot of money can be saved and the system would be strengthened if corruption is dealt a fatal blow.
We would not pretend not to know that public sector workers are the major enablers and perpetrators of corruption; and are the prime culprits in the devastation of the country’s economy. If we must end the perennial complain of lack of resources, Government must generate the political will to deal frontally with the issue of corruption.
The ghost workers syndrome and the stealing of pension funds, among others, are symptoms of the corruption and theft going on in the public service. Technology adoption can go a long way in dealing with this problem. Reckless employment strategies are seen as a way of proving that the governments care about unemployment, whereas the real strategies include creating an enabling environment for businesses to thrive which in turn will lead to an increase in employment by private sector. There is a legal system in place and also appropriate agencies to tackle the menace; but is no longer doubtful that both federal and state governments lack the political will to ensure productivity and efficiency of government. There is an urgent need for a national orientation of the public, who have come to accept systemic corruption as inevitable.
Something urgent needs to be done about the humongous salaries of politicians. And there is definitely a need to pay the Nigerian worker a living wage. We must be quick to point out, however, that poor salaries are not necessarily the cause for corrupt practices, as those with stupendous salaries often engage in grand corruption.
We also acknowledge the fact that the Nigerian economic and political system has been built on economic and social parasitism, in which state officials live fat on the public treasury. That is why talk about the implications of corruption is often seen a smokescreen or a diversionary tactic to moralise the issue and turn it into an empty slogan. The kind of corruption referred to here has deep roots in the generalised parasitic culture that pervades all aspects of life.
We can’t honestly be talking about corruption or about the perceived negative impact of wage increases on the economy unless the issue of the huge disparities in pay and conditions of service in the Nigerian economy or the official reward system is addressed. Nigerian workers are among the most miserably paid in the “middle income” countries of the world. The Nigerian worker bears the brunt in a generalised regime of depressed and suppressed wages.
Given the general state of affairs, government needs to look at the state of the economy from a much broader perspective. The country’s economy and exchange rate are tied to the Dollar. That’s one hidden reason for the stagflation that the economy is experiencing. The Federal Government might need to take a deep look at its macro-economic policies and consider other options including the possible benefits of joining the BRICS countries. After years of brutalisation from the World Bank and the International Monetary Fund, the government needs to explore other sources of new economic models. It would be great to move away from the Dollar.
