CHAPTER ONE

1.0       BACKGROUND OF THE STUDY

Wages are among the major factors in the economic and social life of any organization or community. In many advanced countries, the wages of manual workers total forty percent or more of the national income. Together with the salaries paid to clerical and non-manual workers, many of whose standards of living are little, this can absorb about sixty percent of the national income says workers ‘s Educational Manual (1982).

In the developing countries however, a large part of wage earners consists of agricultural peasants working in the subsistence farming and self-employed persons engaged in small –scale rural handicraft and petty trading.  Therefore, the proportion of wage earners is small, being as low as ten percent or fifteen percent of the total working population in some countries. It is equally noteworthy that in developed nations, average wages are below the average of all incomes (in poor nations reverse is the case ).  This development arises as a result of the low incomes of workers in the industry and government Mulvey (1968).

Workers and their families depend almost entirely on to provide for their needs.  In industry, wages form a big part of employer’s cost of production. Many governments are concerned with “wage standards “  which affect social climate of the country, employment, prices , inflation, national productivity and the ability of the country to export enough goods to pay for it’s import so as to have a clean international trade balance. That is why a simple economic theory puts it thus employment should fall when wages grow faster than prices Workers educational Manual(1969).

As a result of frequent conflicts between workers and employers due to poor wages, trade unions and their members press for improved wages to enable them meet up with needs. High wages boost workers morale, establishment of new undertakings and the expansion of older ones and ultimately economic growth. Basic problems of wages are the same the world over but methods of resolving such conflicts differ. The employers and workers (collective bargaining) at individual undertakings fix wages of some countries whereas; in others, they are regulated by collective agreement that apply to whole industries.

In countries with planned economies, the total wages amount is fixed centrally in accordance with the national economic programmes thereby occupying wages into the polices of workers, employment and government. Where trade unions are well established, bargaining is very keen. If demands are so high, workers may be driven to negotiate their demands and persuaded to discontinue with conflicts, as they are not earning wages while on strike.