• Sunday, July 14, 2024
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BusinessDay

Reviving the middle class

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Beginning from the early 1980s, the income gap in the Nigerian society began to widen. This widening income gap gave birth to a kind of skewed socio-economic structure that led to the virtual disappearance of the middle class. Before they departed the country at independence in 1960, the colonial masters did leave behind well-structured social strata: the low income, middle class, and high income earners. This social classification of personal income earners, in the public service and private organisations, institutionalised a balanced class structure that placed every employee where he/she belonged in terms of disposable income standards, especially as it concerns conditions of service and other benefits.

Up till the time of Shehu Shagari’s Austerity Measures, it was easy for university graduates to secure white collar jobs even while in the graduating class through on-campus job recruitment interviews. Job seekers then had no need for “long legs”, nor did they need to be “well connected” to get a good job. Merit was the watchword. Bright and successful graduates who were gainfully employed would usually resurface for their convocation shortly after in their official cars with testimonies of other juicy packages attached – like well-furnished accommodation, loans for personal cars and housing, leave allowances and retirement benefits. Today, the story is different. It’s now a tale of misery as many unemployed graduates of up to seven years or more post-NYSC are still being catered for by their poor parents who could as well be rural dwellers.

However, it is worthy of note that the erosion and eventual disappearance of the middle class population in Nigeria got to its peak when yet another economic policy of the Ibrahim Babangida regime, Structural Adjustment Programme (SAP), came onboard and introduced a totally reshaped social stratum that was hinged on falsehood and “favoured disposable income”, regardless of the source of such wealth. This development added insult to the injury as it relegated personal income earners, including even university professors, to the background. This state of affairs, occasioned by rot in our moral fabric, is traceable to lack of patriotism at all levels – a situation where even highly educated public servants prioritised meeting their household needs at the expense of their official assignments. This unfortunate survival-of-the-fittest scenario only placed one either in the category of “the very rich” or “the poor income earners”, academic qualification notwithstanding. How much one could afford was what counted. The recent unnecessary argument over salary structure and minimum wage of N18,000 by some state governors clearly portrays the existence of an abnormal social structure in the economy.

Restoration of a normal structure that consists of a middle class can only be carried out as a government policy on the basis of personal income earned by all employees who must be seen as consumers with purchasing power, and not just fat and tempting disposable income. The same government would further stimulate the successful implementation of such policy by creating an enabling environment to power the provision of a sustainable employment generation and job availability in the labour market.

Post-apartheid South Africa saw a fast growth of the upcoming middle class among many blacks based on the economic packages and empowerment programmes that encouraged a sustainable growth among blacks, thus eliminating poverty and promising a bright and healthy future for children. In a similar vein, the right policies and determined leadership could reduce poverty in our economy, where a strong signal is sent to the world through a responsible, impressive and remarkable entrepreneurial support for trade and finance built on stable economic environment, modern institutions and the rule of law in all sectors.

China achieved this in a single generation through market reform where government energies shift away from productive activities in a “state-firm relationship”, with competitive and private firms featuring in industry and services. This strategy has made it possible for the Chinese economy to avoid major social unrest by state-owned enterprises and provide a framework for urban social welfare and a rebuilt rural system that legislates for growing private economy. This strong administrative capacity relieves the government of the excessive wages being paid by state enterprises to redundant workforce (as we still experience such today), which goes further to impose a large fiscal burden on society. When such economic responsibility is pushed down the hierarchy, administrative work becomes more economically-oriented and less cumbersome while firms have independent budgets and self-responsibility policies to run businesses more efficiently, as managers become solely responsible for the economic health of the organisations over which they preside. For Nigeria, such common prosperity will ameliorate the inequality that created income gap, further revamp the social equity, and restore the middle class structure in the economy. 

 

Nwachukwu writes from Onitsha, Anambra [email protected]

 

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