CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
The Nigeria labour
market in recent years has experienced problems such as strikes, unemployment
and reduction in productivity.
Labour conflict is a
phenomenon that most often takes the form of strikes [where they are permitted]
or, as in the public sector in the united states the arbitration procedures. In
the United states arbitration is frequently used in the public sector when strikes
are forbidden. The arbitrators are generally experts picked by the employers
and unions following a procedure setout by the government.
Unemployment is one of
the developmental problems that face developed and mostly developing economics
of which Nigeria constitute 2/3 [two third] of the population of developing
countries. During the last 30 years, the industrialized countries have evolved
in different directions with respect to unemployment.
The minimum wage
legislation exists in 22 [OECD] organization for economic cooperation and
development. Such legislation has generally been framed with the intent to
compress wage inequality. But the
effectiveness of the
minimum wage as an income redistribution tool is often criticized, since by
raising the cost of labour it can have negative effects on out put and
employment .Economic analysis suggests that the effects of the minimum wage on
employment actually depend on the initial level of minimum wage.
The minimum wage can be set on an
hourly, daily or monthly basis
.Everywhere thepublic
authorities govern the mode of its calculation but it can also be bargained
over between employers and employees.
The effect of the
minimum wage depend on the characteristics of the labour market to which it
applies . However , other theoretical framework s like the monopsony model or
the matching model with endogenous labour market participation or job search
effort highlight situations which arises in the minimum wage and leads to an
increase in hiring.
An active and
functioning labour market is important for economic stability .The Nigeria
labour market has been experiencing a lot of crisis over the years .Loss of
manpower which policy makers fear will adversely affect the national output .
The impact of labour market crisis in
developing economies using Nigeria as a case study generates welfare loss in
terms of lower output thereby leading to lower GDP, lower income.
1.2 STATEMENT OF THE PROBLEM.
The voluminous literature on the source
s of economic growth identified awide range of natural and government imposed
stimulants and impediments to growth.
In particular, a huge
level of educational attainment, an open – trading regime , a low level of
government consumption and political stability are generally seen as having a
significant on internal growth is its interest in the effect of institutions on
economic growth and the vital role played by the labour market institution s in
economic growth . The high rate of labour unionization has been a notable
characteristic of a number of economic s with different growth performance s,
though probable link between labour unionization and growth has been frequently
noted.
This paper attempts to look at the
effects of labour market crisis on developing economics using Nigeria as a case
study .Strike volume has been studied from a number of viewpoints. One view
point attribute strike
propensity to such
economic factors as unemployment, inflation and real wage change [faber 1978].
The other view point is the organizational perspective which states that
strikes are related to such structural factor as the extent of unionization and
the degree of centralization and institutionalization in collective bargaining
[BRITTE AND GALLE 1972; SYNDER 1975 ].
Most of the developing
economics are faced with numerous labour market crisis and the Nigeria economy
is not an exception especially after the [SAP] Structural Adjustment Program.
The Nigeria labour market problem could be seen as one of the chronic labour
crisis with high wage inequality and unemployment. Since independence there has
been series of distortions in the labour market. The market is highly distorted
and characterized by insignificant imbalances and industrial actions embarked
upon by the Nigeria labour congress [NLC] pressing for improved working
conditions for workers .These actions are in the form of strikes .
The academic and non-
academic union of the Nigerian tertiary institution are not left out as they
embark on several actions to either pressfor improved working condition,
redressing the wage inequality problem and in some cases to register their
disagreements with
government development
program. All these lead to loss of man-hour which policymakers fear will adversely
affect the national output.
During the military
era, it was not news for workers to embark on strike as it was a potent weapon
at the disposal of the workers to drive home their demands.
What then have been the
effect of these myriad of the labour crisis on the productivity and the growth
of the Nigeria economy? The above questions have not adequately received
attention empirically.
Hence, this research
work tends to investigate the effect of these labour market crisis on Nigeria
economy growth and productivity using Man-hour lost will be proxy to the labour
market crisis.
1.3 RESEARCH
QUESTIONS
1.
What is the effect of labour market crisis on Nigeria economic growth.
1.4 OBJECTIVE OF THE
STUDY.
The broad objective of
these research is to investigate the effect of labour market crisis on
developing economic s using Nigeria as a case
study .Specifically
this research work is set out to achieve the following objectives.
1. To investigate the
effect of labour market crisis on economic growth of Nigeria.
Note:
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