Minimum Wage: Let Nigerian Workers Breathe!
Though the quest and agitation for increased minimum wage by Nigerian workers is as old as Nigeria, every time it’s ripe for an upward review, the atmosphere appears to become tense and rancorous. The recent demand by the Nigerian Labour Congress (NLC) for N615,000.00 as the new minimum wage, will begin a new round of negotiations between Government and Workers, represented by the NLC. How realistic and feasible is the NLC’s demand for this sizeable upward review of workers salaries, especially with the present economic downturn? Is the NLC demand justified? Does the Government have the capacity and/or the willingness to pay such bumper wages? Should there be a decentralisation of the Minimum Wage, considering the fact that size of the work force, the cost of living, IGR and Federal Allocation differs from State to State? Norrison Quakers, SAN; Chief Aikhunegbe Anthony Malik, SAN; Jide Ojo and Jude Igbanoi give their perspectives on this weighty issue of national concern. But, one thing they all appear to agree on, is that the current N30,000 minimum wage is grossly inadequate, as it is a take home pay that does not take anyone home
Ongoing Agitation for Minimum Wage Increase
Norrison Quakers, SAN
Wages have become the top issue for Nigeria’s organised labour movements, in the past year. Reacting to recent increases in the cost of living, the labour movement has been calling for an upward review of the national minimum wage, currently N30,000 (US$24) a month.
Definition
A minimum wage is the lowest remuneration that employers can legally pay their employees – the price floor below which employees may not sell their labour. The Committee of Experts of the Governing Body of the International Labour Organisation (ILO) at the 168th Session had concluded that the minimum wage, ‘represents the lowest level of remuneration permitted, in law’ paid hourly, daily or monthly.
Given the fact that minimum wages pose an increase to the cost of labour, companies often try to circumvent minimum wage laws. They achieve this by using gig workers, by moving labour to locations with lower or nonexistent minimum wages, automating job functions, etc. However, most countries have minimum wage legislation in place.
Background
In 1972, the Udoji Public Service Review Commission was set up by the Military Government to examine the organisation, structure, and management of public service in Nigeria; and in 1974, the Commission returned with far-reaching reform proposals, including the increase of workers’ wages. The Government followed the recommendations. However, public sector workers were the main beneficiaries.
It was on September 3, 1981 that the first minimum wage law was introduced in Nigeria, covering all full-time workers except seasonal workers, and those who worked in enterprises employing fewer than 50 workers.
Of paramount importance to this article, is that the legislation came on the wings of agitation by the Nigerian Labour Congress (NLC), under the leadership of Hassan Sunmonu, and the key basis was for improvement to the welfare of workers. Since then, the minimum wage in Nigeria has been revised a number of times, but it has not kept pace with the cost of living in Nigeria.
It became N250 in 1991, N5,500 in 2000 and N18,900 in 2011. The current N30,000 took effect in 2019, under the subsisting National Minimum Wage Act of 2019, which defines the minimum amount of money an employer of labour is required to pay the lowest paid worker monthly as N30,000.
Key Issues
This Article is geared at lending a voice to the discourse on three levels, to wit:
I. The realism of NLC’s demand for N650,000 minimum wage
II. The attitude of the State Governors who maintain their inability to pay more than N30,000
III. What Nigeria should do about minimum wage, in the face of spiralling inflation, harsh economic conditions across the nation and availability of resources to actualise the minimum wage increase.
Before responding to these three issues, we look at the broader conversation on whether the minimum wage protects workers from extreme poverty. Analysts have said that, it depends on how poverty is measured.
Where a nation establishes a poverty line (or a minimum income level), which is usually set very low, below which someone would be considered poor, this minimum amount is deemed adequate to maintain an acceptable living standard, based on the cost of living in that country. However, if a multidimensional measure of poverty is used, that is, one that considers income, access to health, education, and living standard indicators (including sanitation, drinking water, electricity, and housing), the minimum wage is inadequate.
In reality, Nigeria’s minimum wage traps workers in a cycle of poverty, and as of 2021, when the latest data was compiled, 47.3% of Nigerians were multidimensionally poor. That number may have gone up significantly, following the removal of fuel subsidies and a galloping inflation rate of 33%. The subsequent steep increase in the cost of living, without wage adjustments, can only push more Nigerians into poverty.
It is therefore, possible for someone earning the minimum wage to be regarded as non-poor under the income measure, but poor when the multidimensional measure is used. The current minimum wage of N30,000 (US$24) in Nigeria cannot extricate workers from multidimensional poverty, and the number of poor people in Nigeria has been rising for the past eight years. It will continue to do so until the minimum wage reflects the cost of living and recognises the salience of social services like health, education and housing.
Another reason the minimum wage does not protect Nigerian workers from poverty, is that it is not indexed to inflation. Inflation has been rising faster than wage growth in Nigeria, thereby decreasing the real purchasing power of workers. Their income buys less and less. Inflation rose from about 11% in 2008 to 25% in 2023. The minimum wage has not increased significantly, within the same period.
The current minimum wage has had a negative impact on the Nigerian economy, as to make ends meet, many workers are now doing “side hustles”. Many public-sector workers are hardly available in their places of work, and when they are, they are very susceptible to corruption. The low wage has equally undermined the morale and productivity of the workers, creating a sense of deprivation among them.
Statement of Case
Sequel to his election into office, the two primary labour organisations in Nigeria – the NLC and the Trade Unions Congress (TUC), presented a proposal for the welfare of the Nigerian workforce, and the President of the Federal Republic of Nigeria, Bola Ahmed Tinubu, constituted a tripartite Committee comprising government, labour, and private sector representatives in January of 2024 to assess the N30,000 minimum wage implemented during former President Muhammadu Buhari’s tenure.
It was to that Committee that the NLC and TUC presented their proposal for the new minimum wage for workers in Nigeria, to be N615,000. The Government has refrained from announcing a new minimum wage, citing its reluctance to accept labour’s proposal because it was ‘assessing each State Government’s fiscal capacity and the potential effects of different proposals, to determine an enhanced minimum wage that could be sustained by the States’.
We will now look at the three issues seriatim.
Is NLC’s Demand for N615,000 Minimum Wage Realistic?
Wellington (1991) found data from 1986 to confirm the fact that the real (inflation- adjusted) value of minimum wage had declined, because it had not been increased since 1981. On this issue, President Franklin D. Roosevelt, 1933 had this to say:
“It seems to me to be equally plain, that no business which depends for existence on paying less than living wages to its workers, has any right to continue in this country.”
This begs the question of whether the non-realistic bent for minimum wage is only in the fact that it has been left off for too long, and we are now dealing with an accumulation of benefits.
The National President of the NLC, Comrade Joe Ajaero, gave his analysis of how the proposal of the organised labour for the current minimum wage was arrived by.
According to him:“Living wage is such that will, at least, keep you alive. It is not a wage that will make you poorer and poorer. It is not a wage that will make you borrow to go to work. It is not a wage that will lead you to be in the hospital every day because of malnutrition”.
He said further,
“Let me give you a breakdown of how we arrived at that figure. We have housing and accommodation of N40,000. We asked for electricity of N20,000 – of course, that was before the current tariff increase. Nobody can spend this amount currently. We have a utility that is about N10,000. We looked at kerosene and gas, that is about N25,000 to N35,000. We looked at food for a family of six, that is about N9,000 in a day. For 30 days, that is about N270,000. Look at medical, N50,000 provided, there will be no surgery or whatever.
“For clothing, we looked at N20,000. For education, N50,000. I don’t know about those who tried to put their children in private schools; they will not be able to cope with this amount. We also have sanitation of N10,000. Where we have another bulk of the money is transportation. This is because the workers stay on the fringes, and because of the cost of petrol, this amounted to N110,000.”
The amount put forward by Ajaero may appear outrageous and unreasonable, but is it really? The breakdown is very convincing since the current prices of products in the country have skyrocketed in the last one year, without any measures by government to curb it. If an increase is required, surely, it must meet the desired result.
The NLC President and his comrades have understandably spoken from the point of view of entitlement to socio-economic security. However, in a nation not known for any worthwhile safety nets for the generality of its citizens, it is necessary that it should, at least, make provision for a robust compensation for those working .
The trajectory of minimum wages in Nigeria shows a significant pattern, the first minimum wage in 1981 was N125 per month. At the exchange rate of US$1 = 0.61 naira in 1981, this amounted to about US$204. In 2024, that minimum wage would be equivalent to about 265,000 naira (US$204) per month, going by the current exchange rate of about US$1 = 1,300 naira. As of this writing, the current exchange rate is US$ = N1,424.90. This puts the minimum wage in 1981, at least eight times more than the current minimum wage.
Since May 2023 when the immediate implementation of petrol subsidy removal was announced and the Naira floated, the initial response of the economy was almost 300% devaluation. According to the Nigerian Bureau of Statistics (NBS), the food inflation rate in December 2023 was 33.93% on a year-on-year basis.
Granted that minimum wage varies greatly across different jurisdictions, for example, under certain US State laws, the minimum wage is $7.25 per hour ($14,500 per year), it is $16.28 per hour in the US State of Washington.
The narrative presented by the NLC and TUC does appear to have put a human face to the Nigerian Worker, who has remained faceless over generations, whilst the very cadre of citizens to determine his fate have continued to feed fat on the fortunes of the nation, when in fact these are the products of the Nigerian Worker.
The clog posed by the attitude of the State Governors who say they can’t pay more than N30,000 minimum wage
The States have responded in various ways, and even the N30,000 minimum wage was ignored by some States. Reports have it, for instance, that some teachers in Zamfara State, the most educationally-underdeveloped State in the Federation, receive N8,000 monthly salaries. In many States, workers are owed months, even years, in arrears, while the Governors and other political office holders continue to live like the proverbial mandarins. On what basis would those Governors agree to the payment of a higher minimum wage and when they give a nod, is that not a mere rhetoric?
The cost of governance in Nigeria is high at all levels, coupled with the unchecked corruption and squandering of public resources. These are the areas in which the Government has to intervene, or else it will indeed, have very little to pay government workers from, and continue to postpone the building of essential public amenities. We believe that these politicians must be held into account as they have no idea what value their workforce holds, and the boost that a significant increase in the minimum wage will have on their State’s economy.
Research carried out by David Card and Alan Krueger in 1992 when the minimum wage increased in New Jersey from $4.25 to $5.05 per hour (an 18.8% increase), while it remained at $4.25 in the adjacent State of Pennsylvania showed from the information gathered from the fast-food restaurants in New Jersey and Eastern Pennsylvania that, the increase in the minimum wage increased employment in the New Jersey restaurants.
The Governors ought to be made to recognise the value of a thriving workforce to the prosperity of their States, and it is this re-orientation that will give them the impetus to join the move to revamp the Nigerian workforce and to propel the Nigerian economy forward.
According to former British Prime Minister Margaret Thatcher,
‘Wealth is not created by governments but by the vitality, initiative and enterprise of individuals who want to build something, a business, an industry, a place of learning, a theatre, an orchestra. As they prosper themselves, we believe that they will use their wealth to help others prosper’.
‘Enterprise is the best way to create the wealth you need, to bring a higher standard of living and all the other benefits which we in the West now enjoy.’
When Britain cut taxes and gave the necessary support to boost the morale of the people, the result that was borne out by the statistics was the changing attitudes of the people and Britain’s greater influence in the wider world at the time. Britain’s economic vitality was illustrated by the number of people setting up in business on their own – 1,600 every week that year, and the sense of enterprise had a powerful effect on the economy which grew very fast.
The Governors must be made aware of the fact that economic reform requires the acceptance of initiative and responsibility by people themselves, and this is very difficult in countries which have never known these qualities. Nigeria stands in a position to begin to imbibe those qualities, but in a situation where the Government is unwilling to first play its part and take responsibility for setting up policies that will inform the change, the economic reform we all long for, is not in view.
The NLC’s proposal is said to be a product of a painstaking effort, to capture the cost of living of Nigerian workers and masses in all parts of the country. It was essentially an outcome of an independent research conducted by the NLC and TUC on the cost of meeting the primary needs of an average family around the country. The research was based on a family with both parents alive and four children, without the burden of having other dependents with them.
The Union arrived at the figure before the increase in electricity tariff and the scarcity of petrol across the nation occurred, which would undoubtedly spike the transportation costs contemplated by the proposal.
In view of the provisions of the Minimum Wage Act of 2019, this increment, taking into cognisance the economic realities have legal backing, since it will inure for the next five years regardless of any turns in the economy. Ajaero confirmed this as the basis of their agitations in saying that any figure below this amount becomes a starvation wage and condemns Nigerian workers and their families to perpetual poverty,
“We have to remember that the old one having expired on the 18th day of April, 2024, a new one is expected to have come into effect on the 19th day of April, 2024. However, because of Government’s inability to comply with the Law that demanded for negotiations for a new national minimum wage to have begun six months before the expiration of the existing one, concluding the new one has become unfortunately delayed,” he added.
Finally, on the political will and otherwise of the various Governors to comply with the new minimum wage, Winston Churchill MP had this to say on the Trade Boards Bill, Hansard House of Commons (28 April 1909) Vol 4, col 388
‘It is a serious national evil that any class of his Majesty’s subjects should receive less than a living wage, in return for their utmost exertions. It was formerly supposed that the working of the laws of supply and demand would naturally regulate or eliminate that evil … [and]… ultimately produce a fair price. Where … you have a healthy bargaining … But where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst… where those conditions prevail you have not a condition for progress, but a condition for progressive degeneration’.
What should Nigeria do about minimum wage, in the face of spiralling inflation, harsh economic conditions across the nation and availability of resources to actualise the minimum wage increase
The sentiment is that labour must be realistic, and this is represented by it having in mind the state of the economy, Government’s ability to pay and the need to ensure that the new minimum wage is to strengthen, and not to further undermine the Naira and the economy at large.
So far, there has been some sort of master-servant relationship in which workers have held the short end of the stick. Proper dialogue about macro-economic issues like hyper-inflation, shut down of more factories and millions of small and medium enterprises (SMEs), joblessness and the further endangering of the Naira, have been dangled as reasons for not increasing the minimum wage. However, is there any meaningful move to progress further?
Recognising the urgent need, in May 2017 the House of Representatives moved to amend the National Minimum Wage Act for a compulsory review of workers remuneration every five years, but this has been mere rhetoric. The law as it stands today, requires periodic review of minimum wage to align with the evolving economic realities faced by workers and the analysis by the NLC and TUC in arriving at the proposal is a fair one, going by the current economic realities.
Ex- US President, Theodore Roosevelt, also made a supporting proclamation, when he said:
“We stand for a living wage. Wages are subnormal if they fail to provide a living for those who devote their time and energy to industrial occupations. The monetary equivalent of a living wage varies according to local conditions, but must include enough to secure the elements of a normal standard of living – a standard high enough to make morality possible, to provide for education and recreation, to care for immature members of the family, to maintain the family during periods of sickness, and to permit of reasonable saving for old age.”
Many political leaders have tagged Ajaero and his comrades as insensitive; however, they have not demonstrated genuine sacrifice and leadership, as to gain any credence on this subject matter. The percentage of Nigerians who work in government and organised private sectors is small, compared to the populace, but, that would be a good place to start from. The pervasive hardship is evident, and there is a reason for this conversation to be had.
According to NECA Director-General, Adewale Smart Oyerinde, the Committee’s pace in deliberating upon these issues, has not been commendable, he had this to say: “This protracted delay has the potential to further promote agitation, and fester distrust among stakeholders. We urge the government to, without delay, recall the tripartite committee to continue its assignment as soon as practicable… Employers are in absolute support of a new national minimum wage, as an increase in wages could also promote economic activities, stimulate consumption, and enhance the capacity utilisation of businesses”.
Since the recent reforms in Nigeria, including the removal of fuel subsidy and the unification of the foreign exchange market have pushed the cost of living to newer levels, causing inflation figures to hit 33.2% in March 2024, and compounding an already troubled economy, the labour union believes their proposal can be achieved if the states get their priorities right.
One thing is clear. We must do something, and other alternatives in place in other climes include the following:
•basic income or negative income tax- a system of social security that periodically provides each citizen with a sum of money that is sufficient tp live frugally.
•Refundable tax credit- a mechanism whereby the tax system can reduce the tax owed by a household to below zero, and result in a net payment to the tax payer beyond their own payments into the tax system.
•Earned Income Tax Credit
•The Adam Smith Institute prefers cutting taxes on the poor and middle class instead of raising wages as an alternative to the minimum wage.
•Wage subsidy- a payment made by a government for work people do. It is based on an hourly basis or by income earned.
•Education and training- education or funding apprenticeships or technical training can provide a bridge for low skilled workers to move into wages above a minimum wage.
We can borrow a leaf from data from the United States where, in 2014, job creation was found to be faster in States that raised their minimum wages. In the same year, news organisations reported the State with the highest minimum wage garnered more job creation than the rest of the United States. It is therefore, not apt to assume that a State that raises its minimum wage is doomed to failure. Research has proven to the contrary. Economists in Denmark found that when wage rates were discontinued after a worker turned 18, employment rate dropped to 33 %.
Conclusion
It is self-evident that the purpose of minimum wage is to protect the most vulnerable workers, often in precarious work, as employers can (and are encouraged to) pay above legally permissible minimum. The National Minimum wage debate is essentially for the protection of workers in unorganised sectors against low pay, since businesses will seek to maximise profits by minimising costs even when an economic crisis is looming.
This calls for an overhaul of the current national minimum wage.
Norrison Quakers, SAN, Constitutional Lawyer, Lagos
The Imperative of Minimum Wage for Nigerian Workers
Chief Aikhunegbe Anthony Malik, SAN
Since the start of organised labour unionism in Nigerian around the year 1912, when workers in the colonial civil service collectively constituted themselves into a trade union, taking a cue from their Sierra Leonean counterpart, there have [always] been two major recurring issues with profound impact on the activities and preoccupation of the organised labour in Nigeria. These are factious infighting and the agitation for wage increase, usually expressed in the code name “Minimum Wage”.
Significantly, the focus of this intervention is not on the factious infighting both in the parent and every affiliate union bodies, but on a different constant in the activities of labour unionism in Nigeria, that is, the seeming unending agitation for a raise in minimum wage.
While it cannot be gainsaid that the life of organised labour unionism in Nigeria, just as in any other clime, is characterised by struggles for welfare of workers, it does appear that the organised labour unionism in Nigeria has yet to learn a lesson or two on how continuous wage increase over the years, on account of labour agitations, has only but paled into a will-o’-the-wisp, and has not really improved the welfare of workers in real terms, in the face of concomitant inflation that attends every wage increase. One therefore wonders, why the organised labour union in whose rank and file is resident every imaginable skill, expertise, professionalism and know-how, cannot calmly sit back to take another look at its trend of agitation from the outset of organised labour till now, with a view to fashioning out a different approach at addressing the nagging challenge of workers’ welfare, constantly sticking out like a sore thumb in virtually all agitations by the organised labour.
Even at the risk of being misunderstood, the point needs to be made that the extant agitation by the NLC for wage increase by as a panacea to rising inflation and demands for good living, is at best, an exercise in self-delusion and a knee-jerk grab at a low hanging fruit that can hardly ever deliver true governance or democratic deliverables to the target workers and their Siamese incident of declining welfare.
As the Tinubu-led government muses on how best to meet or address Labour’s fresh agitation for a new minimum wage of N615,000.00, there is the potential of an ensuing fireworks of political intrigues at the NASS for passage of a new Minimum Wage Act or, at the very least, an amendment of the extant one.
Be that as it may, our recent experience and or challenges of implementation of the Minimum Wage Law remain fresh in our collective memories, as to the helplessness of the Nigerian workers when the political class will eventually step into the mix to make nonsense of the Act by another repeat of self-seeking polemics around the principle of federalism, warranting the federating States to decide their individual minimum wage, and not to be bound by any National Minimum Wage Act, just to defeat nation-wide implementation.
Conclusion
Although I am a stern believer in the Marxian posit of the doctrine of “Surplus Value”, which meaningfully prescribes that the difference between the cost of production and the amount the end product is sold, is the worth of the labour dissipated or which went into producing the goods or the service, thus precipitating a commensurate workers’ compensation in that regard. It bears repeating, however, to emphasise the point that, in a developing but fractured governance system such as ours, wage increase achieved without a commensurate improvement in the overall governance deliverables in physical infrastructure, security of lives and property, sustainable education, positive outlook in social orientation of the citizenry etc, is only but a drop on a parched desert land.
Chief Aikhunegbe Anthony Malik, SAN, Abuja
Implications of NLC Demand for 615k Minimum Wage
Jide Ojo
Introduction
President Bola Tinubu is a year old in office. On several occasions he has promised Nigerian workers not only a minimum wage, but a living wage. What Tinubu has in mind as a living wage, is probably known to him alone. On October 2, 2023 after a marathon meeting with the labour unions to forestall their threat of embarking on indefinite strike, he agreed to paying Federal workers N35,000 wage award from September 2023 until a new minimum wage comes into effect and also said a new minimum wage committee will be inaugurated by November 2023. This did not happen until Tuesday, January 30, 2024. It must be stated that labour law expects a new national minimum wage every five years, and negotiation committee to be inaugurated at least six months to the expiration of the extant one. Under Tinubu, it was inaugurated barely three months to the end of the current one.
37-Member Tripartite National Minimum Wage Committee
The new minimum wage should have kicked in by April 2024, but, the only assurance Tinubu’s Government has given, is that whenever it is eventually agreed to, the new minimum wage will take effect from May 1, 2024. As earlier said, the Federal Government on Tuesday, January 30, 2024 inaugurated the 37-man Tripartite Committee on National Minimum Wage. Vice President Kashim Shettima who inaugurated the Committee at the Council Chamber of the Presidential Villa Abuja, charged to them to ensure the timely submission of their recommendations. The Committee chaired by the former Head of the Civil Service of the Federation, Goni Bukar Aji, is made up of members of the organised labour, the private sector and the Federal and State Governments. Shettima said the decision to set up the Committee is a recognition of the need to ensure a decent living wage, and in compliance with the existing National Minimum Wage Act of 2019.
Membership of the Committee cuts across the Federal Government, State government, private sector, and organised labour. Present at the inauguration are some State Governors, including Bala Mohammed of Bauchi State; Mohammed Bago of Niger State; Ademola Adeleke of Osun State, and Bassey Otu of Cross River State. Members of the Committee from the Federal Government include Nkeiruka Onyejeocha, Hon. Minister of State, Labour and Employment; Mr Wale Edun; Minister of Finance & Coordinating Minister of the Economy; Alhaji Atiku Bagudu, Hon. Minister of Budget Economic Planning; Dr (Mrs) Yemi Esan, Head of the Civil Service of the Federation; Dr. Nnamdi Maurice Mbaeri, Permanent Secretary, GSO. OSGF and Ekpo Nta, Esq, Chairman/CEO, NSIWC – Member/Secretary.
From the States, Alhaji Mohammed Umar Bago, Governor, Niger State – representative from North Central; Sen. Bala Mohammed, Governor Bauchi State – representative from North East; Alhaji Umar Dikko Radda, Governor Katsina State – representative from North West; Prof Charles Soludo, Governor, Anambra State- representative from the South East; Senator Ademola Adeleke, Governor, Osun State – representative from the South West; Mr Otu Bassey Edet, Governor, Cross River State – representative from South South are part of the Committee. From the Nigeria Employers’ Consultative Association (NECA) – Adewale-Smatt Oyerinde, Director-General, NECA; Mr Chuma Nwankwo; Mr Thompson Akpabio, with also members from the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) include Asiwaju (Dr) Michael Olawale-Cole, National President; Hon. (Dr) Ahmed Rabiu, National Vice President and Chief Humphrey Ngonadi (NPOM), National Life President.
The members from the National Association of Small and Medium Enterprise (NASME) are Dr Abdulrashid Yerima, President & Chairman of the Council; Hon. Theophilus Nnorom Okwuchukwu, Private Sector representative; Dr Muhammed Nura Bello, Zonal Vice President, North West and also from the Manufacturers Association of Nigeria (MAN) are Mrs. Grace Omo-Lamai, Human Resource Director, Nigerian Breweries; Segun Ajayi-Kadir, mni, Director-General, MAN; Lady Ada Chukwudozie, Managing Director, Dozzy Oil and Gas Limited. From the organised labour, the Nigeria Labour Congress (NLC) Comrade Joe Ajaero, President, NLC; Comrade Emmanuel Ugboaja, mni; Comrade Prince Adeyanju Adewale; Comrade Ambali Akeem Olatunji; Comrade Benjamin Anthony and Prof Theophilus Ndukuba. Also, membership from the Trade Union Congress of Nigeria (TUC) include Comrade (Engr) Festus Osifo, President, TUC; Comrade Tommy Etim Okon, Ph.D, Deputy President I, TUC; Comrade Kayode Surajudeen Alakija, Deputy President II; Comrade Jimoh Oyibo, Deputy President. III; Comrade Nuhu A. Toro, Secretary-General and Comrade Hafusatu Shuaib, Chairperson Women Commission.
Labour Unions Demand N615,000 National Minimum Wage
The Labour Unions have placed their demand of N615,000 as the new minimum wage, and are expecting an offer from the Federal Government. The Unions have also demanded that the new Act should have a two-year life with an agreement for automatic adjustment in wages any time inflation exceeds 7.5%. Unions have also demanded that every employer with up to five workers in his employ shall pay the new minimum wage, and have asked for the strengthening of monitoring and compliance mechanisms to penalise non-complying State Governments and organisations.
On the other hand, the Nigeria Governors’ Forum, on Thursday, May 2, 2024, emphasised the need for the Government and organised labour to come up with a sustainable minimum wage in the ongoing negotiations. The NGF, which made the call in a communiqué issued at the end of its virtual meeting and signed by its Chairman and Kwara State Governor, AbdulRahaman AbdulRazaq, assured labour of Governors’ commitment to pay the workers an improved wage.
The Issues
Giving the rising cost of living, the inflation and devaluation of Naira, the Nigerian Labour Unions are right on their demands. However, the reality on ground is that no government; be it Federal, State or Local, or the organised private sector can afford to adjust minimum wage from N30,000 to a whooping N615,000. As at now, many State Governments are not paying the agreed N30,000 minimum wage of 2019. I recall that Ogbeni Rauf Aregbesola as Governor of Osun State could not pay N15,000 minimum wage to the State workers between 2010 and 2018. Rather, he was paying in percentages. Many State Governors such as Senator Uba Sani of Kaduna State, have voiced their concern that their States are finding it difficult to pay the extant N30,000 minimum wage because of paucity of funds starting with debt burden they have to pay, reduction in their monthly subvention, low internally generated revenue, and increased cost of governance.
Many Governors are of the opinion that, workers constitute barely 10% of the population of their States, and they have to provide social amenities such as good roads, hospitals, schools, electricity, potable water, and recreational facilities for the entire population of the State. More so, Ministries, Departments and Agencies will need to have running cost. So, the country is in a Catch 22 situation. Workers demand for welfare is good, but realistically, affordability and sustainability are concerning.
If forced to pay the new minimum wage, Government at all levels including the organised private sector may resort to retrenchment of workers under the guise of right-sizing and downsizing. Thoughts must also be spared for senior citizens who are retirees. Their pensions and gratuities may not be paid.
The Way Forward
I believe that the new national minimum wage should not be less than N70,000 and not more than N100,000, for purposes of affordability and sustainability. Ultimately, I advice that the Labour Act should be amended, to allow for a decentralised minimum wage negotiation. Federal Government should negotiate with the leadership of labour unions at the centre, while State Governors should be allowed to discuss with labour unions in their respective States, and agree to an affordable and sustainable minimum wage. The truth is that States do not have the same population size, labour force, Federal allocations and IGRs. This reflects in their respective annual budgets. Insisting on national minimum wage will continue to lead to threat of sack of workers or situation where governments will owe workers backlog of salaries. In the organised private sector, many industries and companies are resorting to casualisation in order to reduce administrative cost. They know fully well that, casual staff will have no privileges of full staff who get transport allowance, health benefits, housing allowance, leave bonus, feeding allowance and on retirement, will be entitled to pension and gratuity.
Conclusion
It is imperative for the National Minimum Wage Committee to conclude its work without further delay by arriving at a win-win situation for both the Government and Workers’ Unions. It is noteworthy that, whatever is agreed on will still have to be sponsored by the President as an Executive Bill to the National Assembly who will review it, pass it and send it back to the President for assent before it will become law and operational. Time is therefore, of essence, as the deadline has already been missed. I implore the labour unions to be reasonable and soft-pedal, for a realistic national minimum wage to be expeditiously agreed on. Best of luck!
Jide Ojo, Development Consultant, Author and Public Affairs Analyst
Minimum Wage: Who is Afraid of NLC’s N615k Demand?
Jude Igbanoi
The perennial agitation for wage increase by Nigerian workers, is nothing new to Nigerians. But, what is different in this recent demand for wage increase, is the humongous leap from N30,000 minimum wage per month to N615,000.
While a not a few think this is ill-conceived, others believe that Nigerian workers have always been held in low esteem by every successive government, where their emoluments and welfare are concerned.
Buhari’s Purported Largess
Before the Buhari administration, the minimum wage of Nigerian workers was an abysmal N18,000 monthly.
The perceptible quantum leap from N18,000 to N30,000 under Buhari, didn’t elicit the expected excitement and celebration from either the workers or the masses. This is for the simple reasons that even the N30,000 couldn’t take Nigerian workers home, given the spiralling inflation that had set in, and the fact that most State Governors bluntly refused to pay the stipulated set amount.
To this day, many State Governors still pay their workers less than the stipulated N30,000. The few State Governors who agreed to pay, more often than not, owe their workers many months in areas, giving rise and opening the floodgate for further agitations.
Average Minimum Wages in Other African Countries
Comparatively, Nigeria occupies the lowest position on the minimum wage scale of African countries.
Figures from Wikipedia
· Algeria – $156.19
· Angola – $61
· Botswana – $152
· Burkina Faso – $59
· Cameroun – $62
· Chad – $110
· Djibouti – $198
· Egypt – $123.6
· Equatorial Guinea – $224
· Gabon – $ 255
· Ghana – $433
· Nigeria – $24 (as at May 2024)
It is clear from this available data, that Nigeria embarrassingly romances the lowest rung on the minimum wage ladder of Africa. What could be responsible for this?
1. Lack of will power of the Government, to prioritise workers wages and welfare.
2. Failure or incapacitation of the Federal Government, to compel State Governments to implement the stipulated wages.
3. Inability of most States to mobilise adequate resources from Internally Generated Revenue to beef up their Federal allocations and meet up with their monthly wage bills.
4. Politicisation of the workers salaries and welfare.
5. The worrisome and unfathomable volume of ghost workers in the Federal and State Civil Service.
6. Unavailability of adequate or reliable data of workers in Government employ at all levels, giving rise to bloated figures of workers and their salaries. Instances abound at all levels of government, where retired Civil Servants continue to collect their full salaries many years after retirement.
7. There are also countless instances where dead civil servants’ names continue to be paid their full salaries.
Recommendations
There must concerted efforts of Government at all levels to ramp up revenues (especially IGR), without necessarily imposing heavy taxes on the hapless citizenry. This is one sure way to ensure that Government has adequate resources at its disposal to upwardly review salaries, with the ability and capacity to pay.
Carry out an onsite and forensic audit of Government staff at all levels, to determine the exact number of employees on Government payroll.
Why Fix Minimum Wage?
The objective of minimum wage fixing, as set out in ILO Minimum Wage Fixing Convention, 1970 (No.131) and its accompanying Recommendation No. 135, is to give wage-earners the necessary social protection, in terms of minimum permissible levels of wages. This objective was already implicitly or explicitly contained in previous ILO Convention No.26 and Recommendation No. 30 (applicable to trades) and Convention No.
99 and Recommendation No. 89 (applicable to agriculture), which stipulated that the minimum wage should not be fixed at a lower rate than one which would ensure the subsistence of the worker and his/her family. Minimum wages along with other measures of economic and social policy, aim at reducing poverty and meeting basic needs. Minimum wage fixing alone cannot succeed, without the satisfaction of the minimum needs of all workers.
What Should Determine Minimum Wage
The main criteria for determining minimum wage, according to a study by ILO, are job evaluation, government order, ability to pay (on the part of the employers), cost of living, collective bargaining and the effort of labour unions, the going rate of wages and salaries paid for comparable work by other institutions in the labour market.
The ILO Report also pointed out that: ‘The cost of living is hardly factored in minimum wage in Nigeria, in that the huge cost of living requirements in cities like Lagos is not the same as in Gombe, Ebonyi, Edo and Ondo States, and minimum wage is usually fixed at the same level for all States.
Conclusion
While one agrees that it is the right of workers to reasonable wage increase, they lack the right to fix the percentage of increase as is presently the case where the NLC is demanding N615,000 as the minimum salary for a Nigerian worker.
Should the deadline of two weeks not be met by the Government, a strike is imminent, and consequent negotiation could result in some upward review, which may not be up to the N615,000 being demanded by labour.
Jude Igbanoi
