2.1 CONSEQUENCES OF OVER- RELIANCE ON WAGE EMPLOYMENT.
By the end of this week, the student should be able to:
Wage employment is a situation where a person called a servant is employed by an employer called master under a contract of service to do work for the master and in which the servant is under his control and direction. The servant is always provided with tools to do the work and directed on how the work should be done. And the master pays him salary usually at the end of every month.
There are many graduates of various disciplines who are seeking for jobs in the Nigerian labour market and the labour market no longer has enough jobs for them. Even the few that are employed also face many challenges. Some of the consequences of over reliance on wage employment are:
- Lack of job security
- Fixed small income
- Lack of independence and freedom
- Lack of initiative
- High rate of crime in the society
- High rate of rural urban migration
- Human trafficking/prostitution/death
- Regional crises
- Lack of creativity
Lack of job security: The wage earner can lose his job anytime. There is no assurance that the employer will continue to employ him. This situation can lead to frustration and poverty where the job is the only source of income for the family.
Fixed small income: The income of the wage earner is fixed and small when compared with what successful entrepreneurs earn from their business. The income cannot adequately take care of an average family in Nigeria as there are so many needs to be met.
Lack of independence and freedom: There is no independence and freedom as the wage earner is under the control and direction of his master. The employer can transfer or redeploys him anytime. The wage earner has no time of his own, except when he is on leave.
A wage earner lacks creativity and initiative as he is always engaged in the same kind of duty and has no much time to think.
Over- reliance on wage employment has resulted in youth restiveness in some regions of the nation and some have decided to engage in armed robbery, since they could not get employment from the labour market.
Over reliance has also led to some evil acts like human trafficking, prostitution etc. there is also mass exodus of youths from the rural areas to the urban cities in search of jobs and this has led to neglect of the agricultural sector and other lucrative businesses.
2.2 The advantages of self-employment.
The serious threats of graduate unemployment in Nigeria today has now led to the need for graduates and non graduates alike to seek avenues for self employment.
Self-employment is a situation whereby one becomes an entrepreneur in small scale business takes the risk of uncertainty and also becomes a master who employs others rather being a servant who is on wage employment.
Some of the advantages of self employment are:
- It creates a sense of fulfillment and satisfaction
- It inculcates a sense of independence
- It encourages initiation and creativity
- It cerates employment for others
- It is an opportunity for higher income and status
- The entrepreneur leads rather than follows
2.3 Roles of entrepreneurship in the development of the economy
It is generally accepted that entrepreneurs play a key role in business than the private sector as a result of the advantages of self employment. The following are some of the roles of entrepreneurship in the development of the economy.
a. Products and services: The fundament economic function of business is to make and distribute the products and services that people want. Business entrepreneurs fulfill the role both to discover consumer demands and to do whatever is required to satisfy them.
b. Employment: Entrepreneurs are the major providers of real jobs, that is employment for people who need and want to work. The level of gainful employment is crucial to a nationís well being.
c. Income wages, salaries and profits: Through its employment creation business provides an income base to its stakeholders in terms of salaries, wages, profits and taxes. The task of business to enable the earning of wages, salaries and profits is of crucial importance in order to pay taxes and to provide disposable income to finance consumer spending and savings (investment capital)
d. Provision of social services: Social institutions and services are provided for by the taxes on the incomes of individuals and businesses. E.g. social amenities, security etc.
e. Investment in productive assets: A business needs capital investments to create productive capacity, innovative technology, modernization and the expansion of its productive assets. This is generated through retained profits, borrowings or through sate of equity.
f. National well being: Most of the capital goods, commercial and social services as well as technological knowhow required to satisfy our needs come from business activity, i.e. through economic development of privately owned resources.
g. It changes and rejuvenates market competition. Entrepreneurs stir up the water o competition in the local and international market place. Entrepreneurs are called agents of change in a market economy, because they see environmental change as an opportunity and the use of factors of production to produce goods and services, etc.
1.Explain the advantages of self-employment.
2.What are the consequences of over-reliance on wage-employment?