Govt Needs To Use Fiscal, Labour Market Measures To Save Economy-Salako | Independent Newspapers Limited
Newsletter subscribe

Labour&Industry

Govt Needs To Use Fiscal, Labour Market Measures To Save Economy-Salako

SALAKO
Posted: Apr 19, 2016 at 11:35 am   /   by   /   comments (0)

 

The President of Senior Staff Association of Banks, Insurance and Financial Institutions (ASSBIFI), Comrade Olusoji Salako in this interview with Sylvester Enoghase, speaks on how it is vital that current trends of rising inequality and slowing growth are quickly reversed by concerted action of Government to reduce inequality, generate decent jobs and invest in the infrastructure for faster and more inclusive growth

Excerpt

Have the efforts made by the government in the last three months in 2016 yielded change regarding current economic challenges?

The weakening economic growth as a result of the slump in the price of oil coupled with fuel scarcity, epileptic power supply have slowed the government transformation into better work opportunities of low productivity, poorly remunerated jobs. There is reduction in the share of total employment and the absolute numbers of people living and working in poverty have stalled.

The high and rising inequality in the economy impacts on potential growth by undermining consumer demand, reducing skills, capabilities, opportunities and mobility, as well as weakening social and political cohesion.

It is vital that current trends of rising inequality and slowing growth are quickly reversed by concerted action of government to reduce inequality, generate decent jobs and sustainable enterprises, and invest in the infrastructure for faster and more inclusive growth to save the nation’s economy from collapse.

Government urgent action can also help to diminish the social and political tensions in many parts of the country, which are both a cause and a consequence of increased economic uncertainty.

We are more worried because the labour shares in national income are on a downward trend and the declining labour income share limits household consumption and reduces overall aggregate demand, which is further weakened by low investment leading to low global economic growth.

Are you saying that the increasing income inequality and falling labour shares impact negatively on the growth of the economy?

Yes.  There is a broad trend toward rising inequality and declining labour income share in the country because as income inequality has risen significantly in recent months, as I said earlier, the declining labour income share at the same time limits household consumption and reduces overall aggregate demand, which is further weakened by low investment leading to slow economic growth.
It is clear from financial analysis that there is a rapidly growing body of evidence that high income inequality can have adverse consequences for the pace and sustainability of economic growth.

Our point of concern is that private investment is well below usual levels, despite extraordinarily low interest rates and accommodative monetary policies.

How then do you think the needed labour policy package for inclusive growth can be put in place?

The proper designing of labour market policy and collective bargaining frameworks for inclusive and sustained growth would benefit from the full engagement of worker and employer organisations in policy design and implementation.

These could be made possible through employment protection law and practice interacts with unemployment insurance, training and job placement systems to provide a framework to facilitate worker mobility from less to more productive and better-remunerated employment.
I am of the view that with current private investment and household consumption weak in the country, and unlikely to revive with sufficient vigour and pace to reinvigorate growth in the near term, the three tiers of governments, the Federal, State and Local Governments need to take all available policy tools, including fiscal and labour market measures to save the economy.

Is decent work part of the labour market measures to saving the economy?

Yes. Work is central to people’s lives and the underperformance of the nation’s economy especially in terms of jobs and wages is a major cause of heightened political and social tensions and political uncertainty.

This is because Nigerians are increasingly questioning the capacity of the institutions and actors of public life to provide solutions to their most pressing concerns or even the sincerity and legitimacy of their attempts to do so. Simple answers to complex questions are in demand and some of those on offer do violence to the values of democracy, human rights, tolerance and solidarity.
Access to decent work has to become part of the government approach to the crisis. This in turn requires detailed work on appropriate labour market policies that enable Nigerians to have access to decent work opportunities.
Nigerians needs strong frameworks for collective action more than ever but our political leaders seem to be turning inward making the construction of a concerted programme to break out of the low growth trap even more difficult.
A key driver of progress across the Sustainable Development Goals (SDGs) is a shift towards more inclusive growth patterns, which generate decent work and decouple economic growth from environmental degradation. Achieving gender equality, in line with the 2030 Agenda, is an indispensable precondition for the realisation of a sustainable development that leaves no one behind and ensures that the future of work is decent work.