Nigerian economist Dr. Okechukwu has called on labour unions to focus on advocating for accessible mortgage programs for workers rather than solely pushing for a minimum wage increase. Dr. Okechukwu argues that in the current economic climate, characterized by stagflation (a combination of high inflation and stagnant economic growth), a higher minimum wage could exacerbate the situation.
“While an increase in minimum wage might seem beneficial on the surface,” Dr. Okechukwu said, “it could lead to businesses raising prices to offset their increased labor costs. This would worsen inflation and potentially lead to job cuts as companies struggle to maintain profitability.”
Dr. Okechukwu proposes that promoting mortgage accessibility would be a more sustainable solution. “By enabling homeownership, particularly for low- and middle-income earners, workers can build wealth and achieve greater financial security over time,” he explained. “This would provide a buffer against inflation and contribute to a more stable economy.”
The economist suggests that labour unions collaborate with policymakers to develop initiatives that would make mortgages more affordable for working Nigerians. This could involve measures such as:
- Government guarantees for lenders: Reducing the risk for lenders by offering government guarantees on mortgages for qualified borrowers.
- Lower interest rates: Working with financial institutions to create mortgage products with lower interest rates specifically targeted towards working-class Nigerians.
- Relaxing down payment requirements: Making homeownership more attainable by allowing for lower down payments on mortgages.
Dr. Okechukwu’s suggestion has sparked debate among labour unions. While some acknowledge the potential benefits of mortgage accessibility, others remain concerned that prioritizing housing initiatives could delay a much-needed increase in minimum wage.
It remains to be seen how labour unions will respond to Dr. Okechukwu’s proposal. The conversation, highlights the complex challenges of navigating economic issues like stagflation and ensuring the well-being of Nigerian workers.
