Wage rigidity and the Super Eagles

It is a classic idea in economics. Wage rigidity. Wages go up very easily. Reducing wages though is always very tough as the NFF has had to find out the hard way. As it so happened the match bonuses for the Super Eagles was doubled sometime during the 2010 world cup qualifiers. Something about motivating the players to qualify. Doubling the bonuses was unsustainable of course. To be fair it wasn’t the NFF’s idea. It was foisted on them by the presidential task force. Of course nobody really complained about the unsustainability then.

Fast forward to 2013 and the NFF predictably cannot sustain such bonuses. A regular company would just fire workers and consolidate but that option isn’t really open to the NFF. You can’t show up for a match with only 10 players. Hence the cut in bonuses. Cutting bonuses hardly ever goes down smoothly as they have discovered.

Its always interesting to see a classic economics idea actually happen so clearly. Hopefully they think hard about the long term consequences before hiking bonuses or doubling wages three months to elections.

http://www.kickoff.com/news/35016/nigerias-fifa-confederations-cup-bonus-dispute-has-happened-before-in-nigerian-football-

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s