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.