₦airaland Forum

teepain:
Nice analysis. Let me elucidate further. The average Nigerian civil servants (those gainfully employed) gets to work by 9 am, chats away with his/ her colleagues for at least 1 hour per day, fiddles with his phone while at work for some considerable amount of time, some would find time to negotiate for wares from various sellers, do some work and by 3pm they are rounding up for the day.

Effectively, I am not sure that any Nigerian civil servant puts in more than 3-4 hours of effective work per day. Hence, the low productivity. This extends somewhat to the private sector and the elected officials. This explains why Nigeria is in this mess that we are in. To get ahead of this malaise, we have to find a way to get government officials to court their excess and unjustifiable renumeration, both official and official ones. And we all have to reconsider our contributions to the national purse and do better than we currently do.

Gboom:
Do you know some people are happy about this current imbroglio and they won't benefit a dime from the NLC fight.
This situation is likened to minority pushing majority into crisis

casualobserver:
Like I said it is a chicken and egg situation. It is robbing from Peter to pay Paul.

Let me give you an example to illustrate: You have a farm of 1 acre with 10 workers. Your competitor farms the same 1 acre with 3 workers. The yield and therefore the income from 1 acre is the same. The farmers in farm1 are naturally poorly paid because there are 10 of them doing the job of 3 people in farm 2 for the same output, let us assume 1 acre of land can only produce a fixed amount of maize. Don’t forget the price of the maize for both farms is the same in the market….. a customer is not going to pay the farmer a higher price because he has 10 workers, if anything the price of the products in farm 2 will be cheaper because his costs are lower but for the sake of this example let us assume they both get the same price.


Remember I mentioned GDP earlier? The Output per worker (productivity) in farm 1 is lower than farm 2. If the both sell maize for N100,000, Farm 1 with 10 workers has an output per capita or productivity of N10,000 per worker whereas in farm 2 it is N33,000 per worker.

Therefore it makes sense that a worker in farm 2 is paid N20,000 for his work totaling N60,000 in salaries, let’s say materials cost N30,000 leaving a profit of N10,000 for the farmer. He is happy to earn just 10,00 from that farm because he knows his workers are efficient and do all the work. In contrast farm 2 has the same materials and input costs of N30,000, all he has left to pay the 10 workers is N70,000. Assuming he doesn’t even make a profit, the worker in farm 1 cannot earn more than N7,000. Now the farmer must make a profit otherwise he will shut down the farm. So he takes a lower profit of N5,000, meaning all that is available to pay his workers is N65,000, meaning the income of the farm 1 worker based on his productivity is N6,500. Imagine farm 1 workers saying they want a salary increase to N10,000, what will happen if he agrees? The farm will close down because the output or GDP of the farm cannot sustain that level of income due to their low productivity. It will mean they have costs of N130,000, income of N100,000 and loss for the farmer!!!

That is why I keep emphasizing the importance of our GDP per capita of N150,000, I.e the average output of all Nigerian workers from the lowest to the highest…it cannot sustain a minimum wage above N70k without a drastic increase in productivity. Increasing purchasing power without increasing productivity is just kicking the can down the road. If you increase the purchasing power of the 10 workers in farm 1 and they are still only producing 100,000 worth of maize you are just going to induce inflation because their output is still the same and the prices of the things they buy will go up because those workers have more money but you the farmer will incur debt or go bankrupt and so in the end you will be forced to close down the farm.


The solution is either 1) to reduce the number of workers for the same output if that is the only farm you have 2) leave salaries as they are for the same output or 3) find another acre of land and move 5 workers to the new farm in which case you can double their wages because their productivity has doubled.

Bottom line Nigeria has a worker productivity problem not a purchasing power problem. The poor purchasing power is a result of low productivity. Increasing purchasing power for the same level of productivity is a recipe for inflation. But most importantly, just as the farmer cannot increase salaries beyond the income of his farm, you cannot increase salaries in a country beyond the output of your country. Again this is why I keep emphasizing the importance of our GDP per capita, it is the value of the output of the average Nigerian. You can’t give what you don’t have!!!

If 3 workers can produce N100,000 in farm output at another farm, you solve the salary problem of the 10 workers by sacking 5 and creating another farm for the sacked 5. The output increases to N200,000 and you can pay all better wages. The problem is the same workers in farm 1 who want salary increase will down tools at the farm if you suggest it.

wirinet:
It's a pity I am very busy at the moment, as a result I cannot refute your claim in more details.

You are over simplifying one aspect of economics - Microeconomics and ignoring all the other aspects, and then ignoring completely Macroeconomics.
If you study the kaynesian school of thought, it advocates for spending your way out of recession. Government has to pump money into the economy through which ever means - Borrowing, wage increase, etc to stimulate economic activities. How do you think the US was able to survive the great depression of 1929? How do you think Europe was able to recover their economies less than 10 years after WWII? They pumped money into the economy. Not just into the economy, but into infrastructures and production
Here we are doing the reverse. Any money pumped into the economy is quickly swallowed up by few political elites and is even taken out to other economies.

If I have time later I will go into more details.

OviOrunmila:
Is it not the same blood that runs in the body of the Northerner that runs through you....

Why can't you start your own farm and let ppu come. To you and buy

kilmot:

Half bread is better than chin-chin

casualobserver:
Like I said it is a chicken and egg situation. It is robbing from Peter to pay Paul.

Let me give you an example to illustrate: You have a farm of 1 acre with 10 workers. Your competitor farms the same 1 acre with 3 workers. The yield and therefore the income from 1 acre is the same. The farmers in farm1 are naturally poorly paid because there are 10 of them doing the job of 3 people in farm 2 for the same output, let us assume 1 acre of land can only produce a fixed amount of maize. Don’t forget the price of the maize for both farms is the same in the market….. a customer is not going to pay the farmer a higher price because he has 10 workers, if anything the price of the products in farm 2 will be cheaper because his costs are lower but for the sake of this example let us assume they both get the same price.


Remember I mentioned GDP earlier? The Output per worker (productivity) in farm 1 is lower than farm 2. If the both sell maize for N100,000, Farm 1 with 10 workers has an output per capita or productivity of N10,000 per worker whereas in farm 2 it is N33,000 per worker.

Therefore it makes sense that a worker in farm 2 is paid N20,000 for his work totaling N60,000 in salaries, let’s say materials cost N30,000 leaving a profit of N10,000 for the farmer. He is happy to earn just 10,00 from that farm because he knows his workers are efficient and do all the work. In contrast farm 2 has the same materials and input costs of N30,000, all he has left to pay the 10 workers is N70,000. Assuming he doesn’t even make a profit, the worker in farm 1 cannot earn more than N7,000. Now the farmer must make a profit otherwise he will shut down the farm. So he takes a lower profit of N5,000, meaning all that is available to pay his workers is N65,000, meaning the income of the farm 1 worker based on his productivity is N6,500. Imagine farm 1 workers saying they want a salary increase to N10,000, what will happen if he agrees? The farm will close down because the output or GDP of the farm cannot sustain that level of income due to their low productivity. It will mean they have costs of N130,000, income of N100,000 and loss for the farmer!!!

That is why I keep emphasizing the importance of our GDP per capita of N150,000, I.e the average output of all Nigerian workers from the lowest to the highest…it cannot sustain a minimum wage above N70k without a drastic increase in productivity. Increasing purchasing power without increasing productivity is just kicking the can down the road. If you increase the purchasing power of the 10 workers in farm 1 and they are still only producing 100,000 worth of maize you are just going to induce inflation because their output is still the same and the prices of the things they buy will go up because those workers have more money but you the farmer will incur debt or go bankrupt and so in the end you will be forced to close down the farm.


The solution is either 1) to reduce the number of workers for the same output if that is the only farm you have 2) leave salaries as they are for the same output or 3) find another acre of land and move 5 workers to the new farm in which case you can double their wages because their productivity has doubled.

Bottom line Nigeria has a worker productivity problem not a purchasing power problem. The poor purchasing power is a result of low productivity. Increasing purchasing power for the same level of productivity is a recipe for inflation. But most importantly, just as the farmer cannot increase salaries beyond the income of his farm, you cannot increase salaries in a country beyond the output of your country. Again this is why I keep emphasizing the importance of our GDP per capita, it is the value of the output of the average Nigerian. You can’t give what you don’t have!!!

If 3 workers can produce N100,000 in farm output at another farm, you solve the salary problem of the 10 workers by sacking 5 and creating another farm for the sacked 5. The output increases to N200,000 and you can pay all better wages. The problem is the same workers in farm 1 who want salary increase will down tools at the farm if you suggest it.

Babysho:
@teepain

I think casualobserver is forgetting some factors. Firstly, just like teepain said, most of the civil servants, the senators, most of the governors, even the president are not working. The entire public sector is overfilled with physical ghost workers. So yes, I think it's better to have some layoffs for livable wage and let the actual workers get productive with risk of losing their jobs.

Another factor is that in your example, the farmers are earning less than even the workers like a communist society. Nigeria is a capitalist society and the foreign and local investors earn X50000 their initial investment with no ceiling. Even Nigeria govt want to put small money in Nigeria and remove big money 😂😂 Nigeria govt will build inferior roads and then add tollgate.

The real discussion Nigerians and NLC should be having is MAXIMUM WAGE or INCOME TAX. With maximum wage, the profit from the organisations will be high and Nigeria like USA must implement the rule that you can't take profit out of Nigeria. Therefore, the investors will be forced to reinvest in other NEW businesses to make more wages which means new jobs. And that's how you improve productivity and reduce inflation.
With income tax increment, Nigerian govt will only misuse the money so I'd rather have maximum wage, leave the money in the hands of investors.

Coolestguy2023:
No wahala, let us see if every state will be able to pay including the private sector and domestic workers.
There are down sides to this which many ignorant people don't know.
1. Most private companies or even government will downsize which would lead to massive loss of jobs.
2. Those that don't downsize will increase the cost of there products and services rendered.

Last last, inflation will skyrocket and that 100k will just be like 30k in the hand.

casualobserver:
Like I said it is a chicken and egg situation. It is robbing from Peter to pay Paul.

Let me give you an example to illustrate: You have a farm of 1 acre with 10 workers. Your competitor farms the same 1 acre with 3 workers. The yield and therefore the income from 1 acre is the same. The farmers in farm1 are naturally poorly paid because there are 10 of them doing the job of 3 people in farm 2 for the same output, let us assume 1 acre of land can only produce a fixed amount of maize. Don’t forget the price of the maize for both farms is the same in the market….. a customer is not going to pay the farmer a higher price because he has 10 workers, if anything the price of the products in farm 2 will be cheaper because his costs are lower but for the sake of this example let us assume they both get the same price.


Remember I mentioned GDP earlier? The Output per worker (productivity) in farm 1 is lower than farm 2. If the both sell maize for N100,000, Farm 1 with 10 workers has an output per capita or productivity of N10,000 per worker whereas in farm 2 it is N33,000 per worker.

Therefore it makes sense that a worker in farm 2 is paid N20,000 for his work totaling N60,000 in salaries, let’s say materials cost N30,000 leaving a profit of N10,000 for the farmer. He is happy to earn just 10,00 from that farm because he knows his workers are efficient and do all the work. In contrast farm 2 has the same materials and input costs of N30,000, all he has left to pay the 10 workers is N70,000. Assuming he doesn’t even make a profit, the worker in farm 1 cannot earn more than N7,000. Now the farmer must make a profit otherwise he will shut down the farm. So he takes a lower profit of N5,000, meaning all that is available to pay his workers is N65,000, meaning the income of the farm 1 worker based on his productivity is N6,500. Imagine farm 1 workers saying they want a salary increase to N10,000, what will happen if he agrees? The farm will close down because the output or GDP of the farm cannot sustain that level of income due to their low productivity. It will mean they have costs of N130,000, income of N100,000 and loss for the farmer!!!

That is why I keep emphasizing the importance of our GDP per capita of N150,000, I.e the average output of all Nigerian workers from the lowest to the highest…it cannot sustain a minimum wage above N70k without a drastic increase in productivity. Increasing purchasing power without increasing productivity is just kicking the can down the road. If you increase the purchasing power of the 10 workers in farm 1 and they are still only producing 100,000 worth of maize you are just going to induce inflation because their output is still the same and the prices of the things they buy will go up because those workers have more money but you the farmer will incur debt or go bankrupt and so in the end you will be forced to close down the farm. More money in the hands of workers and same level of goods (output) = inflation.


The solution is either 1) to reduce the number of workers for the same output if that is the only farm you have 2) leave salaries as they are for the same output or 3) find another acre of land and move 5 workers to the new farm in which case you can double their wages because their productivity has doubled.

Bottom line Nigeria has a worker productivity problem not a purchasing power problem. The poor purchasing power is a result of low productivity. Increasing purchasing power for the same level of productivity is a recipe for inflation. But most importantly, just as the farmer cannot increase salaries beyond the income of his farm, you cannot increase salaries in a country beyond the output of your country. Again this is why I keep emphasizing the importance of our GDP per capita, it is the value of the output of the average Nigerian. You can’t give what you don’t have!!!

If 3 workers can produce N100,000 in farm output at another farm, you solve the salary problem of the 10 workers by sacking 5 and creating another farm for the sacked 5. The output increases to N200,000 and you can pay all better wages. The problem is the same workers in farm 1 who want salary increase will down tools at the farm if you suggest it.

casualobserver:
Like I said it is a chicken and egg situation. It is robbing from Peter to pay Paul.

Let me give you an example to illustrate: You have a farm of 1 acre with 10 workers. Your competitor farms the same 1 acre with 3 workers. The yield and therefore the income from 1 acre is the same. The farmers in farm1 are naturally poorly paid because there are 10 of them doing the job of 3 people in farm 2 for the same output, let us assume 1 acre of land can only produce a fixed amount of maize. Don’t forget the price of the maize for both farms is the same in the market….. a customer is not going to pay the farmer a higher price because he has 10 workers, if anything the price of the products in farm 2 will be cheaper because his costs are lower but for the sake of this example let us assume they both get the same price.


Remember I mentioned GDP earlier? The Output per worker (productivity) in farm 1 is lower than farm 2. If the both sell maize for N100,000, Farm 1 with 10 workers has an output per capita or productivity of N10,000 per worker whereas in farm 2 it is N33,000 per worker.

Therefore it makes sense that a worker in farm 2 is paid N20,000 for his work totaling N60,000 in salaries, let’s say materials cost N30,000 leaving a profit of N10,000 for the farmer. He is happy to earn just 10,00 from that farm because he knows his workers are efficient and do all the work. In contrast farm 2 has the same materials and input costs of N30,000, all he has left to pay the 10 workers is N70,000. Assuming he doesn’t even make a profit, the worker in farm 1 cannot earn more than N7,000. Now the farmer must make a profit otherwise he will shut down the farm. So he takes a lower profit of N5,000, meaning all that is available to pay his workers is N65,000, meaning the income of the farm 1 worker based on his productivity is N6,500. Imagine farm 1 workers saying they want a salary increase to N10,000, what will happen if he agrees? The farm will close down because the output or GDP of the farm cannot sustain that level of income due to their low productivity. It will mean they have costs of N130,000, income of N100,000 and loss for the farmer!!!

That is why I keep emphasizing the importance of our GDP per capita of N150,000, I.e the average output of all Nigerian workers from the lowest to the highest…it cannot sustain a minimum wage above N70k without a drastic increase in productivity. Increasing purchasing power without increasing productivity is just kicking the can down the road. If you increase the purchasing power of the 10 workers in farm 1 and they are still only producing 100,000 worth of maize you are just going to induce inflation because their output is still the same and the prices of the things they buy will go up because those workers have more money but you the farmer will incur debt or go bankrupt and so in the end you will be forced to close down the farm. More money in the hands of workers and same level of goods (output) = inflation.


The solution is either 1) to reduce the number of workers for the same output if that is the only farm you have 2) leave salaries as they are for the same output or 3) find another acre of land and move 5 workers to the new farm in which case you can double their wages because their productivity has doubled.

Bottom line Nigeria has a worker productivity problem not a purchasing power problem. The poor purchasing power is a result of low productivity. Increasing purchasing power for the same level of productivity is a recipe for inflation. But most importantly, just as the farmer cannot increase salaries beyond the income of his farm, you cannot increase salaries in a country beyond the output of your country. Again this is why I keep emphasizing the importance of our GDP per capita, it is the value of the output of the average Nigerian. You can’t give what you don’t have!!!

If 3 workers can produce N100,000 in farm output at another farm, you solve the salary problem of the 10 workers by sacking 5 and creating another farm for the sacked 5. The output increases to N200,000 and you can pay all better wages. The problem is the same workers in farm 1 who want salary increase will down tools at the farm if you suggest it.

triplechoice:
Very good what you explained, but you should know that in Nigeria most business owners are not knowledgeable enough to know the exact number of workers to employ. They don't like consulting experts because they see it as a waste of money. And so, because of that the person that needs only 3 to maximize profits may employ more than that and end up not gaining much from his farm without understanding why . While the one that needs more than 3 ,may just employ 4 and also end losing in the long run.

LDaVinci:
It is a pity you had to write such a long write up only to fail so spectacularly. And here's why your logic fails:

The income of the FG is not the same as the GDP of Nigeria. And the number of FG workers is not the same as the population of Nigeria. What you will have to do, to assess the productivity of FG workers would be to divide the total income of the FG by the number of FG workers. And the result will be a very different proposition from GDP per capita.

Now if one were to take a look at the 2024 Budget and assume a total Federal Revenue of 27 Trillion and divide that by approximately 1.2 million FG workers, one derives a figure of N22.5 Million as being the output of each employee taken on the basis of an average.

SporaD8:
What is the use of N1m that can't buy you toothpick?
Even if minimum wage is reset to N5000, but with higher purchasing power, then the strike would have been worthwhile!
Tinubu should open southern border, insecurity has crippled Agriculture up north. Let's flood the market with Rice and Chicken from Seme, Honey Beans from Cameroon and nobody will remember strike again.

AqualinaXYZ:
Tinubu is a thief




Certificate forging frog

casualobserver:
The point I was trying to make and I hope I succeeded is that the Nigerian worker is poorly paid because he is inherently unproductive. That is the root cause of his poor wages. If you like use 10 workers to produce a barrel of oil, if you like use 2. The price of oil is the same in the market. Common sense dictates that the country where it takes 10 cannot earn as the country or company where it takes 5. In both cases the rice seller does not give discounts.

AqualinaXYZ:
Tinubu is a thief




Certificate forging frog

casualobserver:
This is what I have been saying. Refineries have been shut for over 10 years producing nothing and collecting salaries. These same workers you can’t sack contribute nothing to GDP and lower the GDP per capita of every other worker but they are the ones striking!! You never see them striking to protest the non working refineries.




It cuts across board.

bixton:
Those at the non functional and operational refineries who are receiving salaries are doing so because the FG who is supposed to put the refineries working are also partly ensuring it doesn't work.
The essence of the NLC and unionism in agitating for higher pay wage is to ensure that the individual who is at the bottom gets a good and realistic wage even though this agitation will also benefit those who are already in top management placement/cadres.

casualobserver:
You are daft! The income of the FG is where it gets the money to pay its workers. The GDP of NIgeris is where the rest of NIgeria get the money to pay their workers. The minimum wage applies to all eligible Nigerians but FG workers are only 0.6% of the population of the country. I hope you are already beginning to see the stupidity of your post before I land.

99.4% of Nigerians get their wages, salaries and income from the GDP of Nigeria. That is why the GDP and by extension GDP per capita of Nigeria is the only determining factor in a sustainable wage. The minimum wage Osifo aand Ajaero are fighting for will not trickle down to you because it is not the government that pays your salary. All it will do induce inflation for the rest of you whose employers cannot match those wages because you are unproductive. If salaries increase and output doesn’t what does that mean? Is that not more money chasing the same number of goods?

In all of this don’t forget that by law the minim wage does not apply to agric workers, casual workers, commission sales staff, part time workers, daily rate workers, private businesses with less that 25 employees. Most Nigerians fall in to this category. So if you think they glare fighting for you, have a rethink. They will increase their salaries, yours will not increase, they will induce inflation for you.

Finally govt is not a business, it collects money for distribution not to 1.2 million workers but to 200m Nigerians. The 1.2 million workers are employed to help the government provide social services for the 200m. If you had any brains even your own calculations would have told you that the govt cannot really afford the minimum wage and their demands are unrealistic. Are you saying govt should not build any roads, schools or hospitals? I know it is unrealistic and just bargaining but do you know that the 490k they are demanding is more than half the entire budget……for just 1.2m mostly indolent civil servants? We should take money meant for 200m people and give 1.2m mostly useless civil servants? Is that the brain you came to this world with?

Your fundamental error is thinking government revenues is a reflection of the output of its civil servants, it isn’t ….government revenues is a reflection of the taxes from the whole of Nigeria including the 99% that are not government workers, it also includes borrowings. This is why we say do not comment on matters you do not understand and when those who do are trying to educate you…keep quiet and learn.

Improve your thought process! This kind of thinking is why you are on minimum wage or earning less than your contemporaries.

LDaVinci:
I stopped reading at the first three words, since they are an unprovoked insult. Withdraw them if you want a serious exchange of ideas. Otherwise, fine, to each his own. I will not read the rest.

LandMann:
Shut up and let the government and nlc agree to a wage that will give the lowest paid worker a sense of hope to achieve something with their salary instead of slaving away their time for a salary that can only feed and take them to work, Thus getting caught in a circle of poverty.

You wonder why Nigerians take the risk of crossing the sahara desert to get to Europe even if the job is to pack shit in Europe? It's because in Europe they pay a minimum wage that the worker can use to feed, transport and acquire more skills so they can earn better with the new skill.

Compare that to Nigeria where you're paid just enough to feed and transport yourself to your workplace, aka slavery site.

I wonder why people like you exist.

Always supporting rubbish without thinking of the consequence for larger society.

casualobserver:
Look at this imbecil3, where you not the one who quoted me to start with. I don’t engage brain dead people on serious issues. What possible serious idea could a poorly educated, ignorant, m0ron who feels the budget of the country is the output of 1.2million civil servants possibly bring to the table?


I am not here for buffoonery that is why I take no prisoners when I am discussing serious issues. You don’t have the intellect to engage me so for both our sakes please stay far away from me because I will rain abuses on you for wasting me time and distracting me with buffoonery.

Coolestguy2023:
No wahala, let us see if every state will be able to pay including the private sector and domestic workers.
There are down sides to this which many ignorant people don't know.
1. Most private companies or even government will downsize which would lead to massive loss of jobs.
2. Those that don't downsize will increase the cost of there products and services rendered.

Last last, inflation will skyrocket and that 100k will just be like 30k in the hand.

casualobserver:
What you need is a brain.

Don’t bother I can tell you have nothing to offer and an intellectual lightweight. I am ignoring microeconomics and ignoring macroeconomics? What a comedian!!! Do you even know what you are talking about? You can’t even spell Keynesian the you are here talking about what one country did, trying? I hope you do t burst your blood vessels trying to appear knowledgeable. This is not an economics assignment by your half baked lecturer.

You are the typical half baked economic student who just regurgitates everything he reads in Western textbooks.

This matter is very simple you eat based on what you produce.

Like I said don’t bother quoting me I won’t read talk less respond.

wirinet:
I thought I was discussing with a matured adult, only to realise I was wasting my time attempting to educating an ignorant and Immature youth.

It is only an Immature and insecure youth that will resort to personal insults when their ignorance is exposed.
Anyway others who are intelligent enough will learn.

When president Roosevelt was elected in 1932 in the middle of the great depression, he immediately too proactive measures to address the economy. Within 100 days in office the President and the U.S. Congress passed into law a package of legislation designed to help lift the troubled nation out of the Depression. He implemented a programme called the new deal.
He successfully navigated the US out of economic crisis.
What action has president Tinubu done outside the old tried and tested failed IMF politicies of increase taxes, remove subsidies and privatisation? What plans and strategies has he put in place to stimulate the economy?

See the screenshot below to learn about how President Roosevelt tackled the Great Depression.

wirinet:
I thought I was discussing with a matured adult, only to realise I was wasting my time attempting to educating an ignorant and Immature youth.

It is only an Immature and insecure youth that will resort to personal insults when their ignorance is exposed.
Anyway others who are more intelligent and exposed will learn.

When president Roosevelt was elected in 1932 in the middle of the great depression, he immediately too proactive measures to address the economy. Within 100 days in office the President and the U.S. Congress passed into law a package of legislation designed to help lift the troubled nation out of the Depression. He implemented a programme called the new deal.
He successfully navigated the US out of economic crisis.
What action has president Tinubu done outside the old tried and tested failed IMF politicies of increase taxes, remove subsidies and privatisation? What plans and strategies has he put in place to stimulate the economy?

See the screenshot below to learn about how President Roosevelt tackled the Great Depression.