Obaseki’s N40,000 Minimum Wage: Experts Anticipate Improved Standard of Living, Consumer Spending in Edo
By Isaac Aimurie
As employees of the Edo State government bask in the euphoria of a new minimum wage of N40,000 in their salary accounts, which makes Edo workers the highest paid civil servants in Nigeria today, experts say the new wage will improve the overall standard of living of the average worker in the State.
According to Mr. Cees Harmon, an analyst with National Economy Newspapers in Abuja, “The new minimum wage of N40,000 in Edo State will put more money in the hands of Edo workers thereby boosting their spending power.”
Harmon added: “That the Edo State Government has gone further in increasing the approved national minimum wage from N30,000 to N40.000 is a great feat, especially considering the fact that more than 50 percent of Nigeria’s 36 States are yet to implement the N30,000 minimum wage.
“The move is wise, not just for the welfare of individuals, but also for the economy of the State. As a matter of fact, by increasing the minimum wage, consumer spending will be increased.
“That, in turn, will spur producers to produce more goods and services in the State. Increased production and consumption means GDP growth has an impact on the macro level.”
Harmon, a former analyst at BUSINESSDAY Newspapers, further said: “On the micro level, the residents of the State would be more empowered to seek better healthcare, send their children to better schools, to name a few, which, in the long run, would have a ripple effect on the larger economy.
“Whereas some might raise eyebrows over possible inflationary effects, the fact remains, from the perspective of monetary economists, that more money in the economy spurs growth.
“Considering the fact, also, that Nigerians are reeling under the suffocating effects of 16.9 percent inflation, which has eroding effects on wealth, the government could at no better time make this move to mitigate poverty.”
Also, commodity futures broker and stock market analysts, J.B. Maverick, in his article published in Investopedia, said: “Higher earnings would improve the overall standard of living for minimum wage workers by providing them with a more appropriate income level to handle the cost of living increases.”
He added that “A boost to economic growth is another potential advantage of increasing the minimum wage, as consumer spending typically increases along with wages” adding that workers’ morale would also be boosted.
Other experts agree that wage increase translates to economic growth in the State as much of the spending will go to small and other businesses and ultimately affect the look of the Edo economy.
Recall that on May 1, 2022, while announcing the minimum wage increase, Governor Obaseki said during the May Day (workers’ day) celebration at the Samuel Ogbemudia Stadium in Benin City: “As we all know, the minimum of N30,000 can barely sustain a family. It will be immoral and mindless of us to continue to pretend that we do not know that our workers are suffering.”
Obaseki added: “The government of Edo has now decided to review the minimum wage for Edo workers from N30,000 to N40,000 a month. Undoubtedly, Edo is the first state since the current outbreak of Coronavirus to take this initiative.
“Even though we would have loved to pay more, we hope that this little adjustment would enable us to cushion the impact of the inflation that we are faced with. There is no doubt that the financial implications will be heavy and put another burden on the government.
“But as a government, we are prepared to make the sacrifices so that the workers can live a better life. Your welfare is our number one priority.”