Awaiting a new minimum wage regime: The journey so far

 This year’s May Day activities in Nigeria were marked with the Nigerian Labour Congress (NLC) and the Trade Unions Congress (TUC) jointly tabling a demand for the upward review of the national minimum wage from N18,000 to N56,000. Minimum wage is the lowest remuneration that employer may legally pay to workers. Equivalently, it is the price floor below which workers may not sell their labor to employers.

In Nigeria today do workers actually sell their labor to employers?

Labour hinges its demands, despite the parlous state of the economy, on the grounds that a minimum wage review is long overdue. The down turn of Nigeria economy has put every worker on their knees to sell their labour to employers for just a penny as the case may be. It is said that Mr. President Administration is out to combat corruption to the last point.

The need for urgent review of minimum wage

Due to the downfall of Nigerian Economy, the increase in fuel price has been a concern to many citizenries in the country and also to the President too. This has lead to the increase in pump price which Labour is agitating for the removal of subsidy.

The agitation of increase in minimum wage was on the mind of workers. This has lead to the early protest of the strike action that happened early this year.

There are also the issues of inflation and purchasing power, among others. So the labour leaders think the wage increase is only a matter of necessity and legality.“With N18, 000, you can’t drive this economy with this kind of miserable pay,” Aremu insisted.

Interestingly, the union’s demand came at a period when government at all levels is facing a cash crunch. Crude oil, the country main source of revenue, has been suffering low price since last year.

At N18, 000 minimum wages, Nigeria ranks alongside Vietnam, Lesotho, Sierra Leone and other low-income paying nations, according to Wikipedia, whereas countries such as Brazil pay $218 minimum wage per month, Egypt, $174 and South Africa $155.

With the burden of additional wages, most states may find it even more difficult to meet their financial obligation.

NLC’s position on minimum wage review

After a 15 men committee was formed, it seems much easier for the Labour Congress to make a proper planning. It was an amazing protest as the Labor NLC threatened to go on a  nationwide strike in protest to fuel subsidy removal and also part of the agreement with labor leaders is to review the minimum wage upwards.

 After the Nigeria Labor Congress (NLC) and the Trade Union Congress (TUC) have made a formal proposal to the Federal Government to increase the minimum wage from N18000 to N56000. But due to the country’s Economy, most workers might have felt that it is not visible. But to some it is a nice one to start with as a way to compesate their past labour.

The President of the NLC, Mr. Ayuba Wabba told reporters on an interview, that the 18,000 Naira minimum wage was negotiated when the exchange rate at that time was almost at N110 to the dollar.

The report warned that the affected states would go bankrupt sooner than later except they shore up their revenue base. But the NLC has already warned that any governor that fails to pay the new wage is breaking the law of the land and such governor should resign from his position.

He assured the workers that he is making every concerted effort to improve on their entire working environment and conditions including their emoluments, pension, and gratuities. But he was not forthcoming whether he would consider the upward review of the workers’ salaries.

How realistic is the proposed minimum wage package?

Labour hinges its demands, despite the parlous state of the economy, on the grounds that a minimum wage review is long overdue. They grumble over the steep rises in the costs of electricity, petroleum products, food items and the general inflationary trends in the economy in the past one year.

These came at a time the 36 governors had just visited President Muhammadu Buhari in Abuja asking for another lifeline, the second within ten months. It will be recalled that President Buhari yielded to pressure from the governors and approved a N804.7 billion bailout, which was released by the Central Bank of Nigeria (CBN) in September 2015.

But in November 2015, barely two months after the bailout, the governors, through the Chairman of the Nigerian Governors’ Forum, Alhaji Abdulaziz Yari of Zamfara State, announced that with 24 states unable to pay salaries, they could no longer pay even the N18,000 minimum wage. The stage is set for a prolonged and protracted Labour dispute, which will surely worsen the state of the economy.

Labour groups lament that the Federal Government as well as the state Chief Executives have continued to live large in spite of the economic crunch. They have continued to maintain large retinues of political appointees, moving around in chartered aircraft and generally refusing to limit public spending.

They argue that if the government cuts down on excesses there would be enough to go round. Though we regret the refusal of the Presidency, governors and the legislative arms of government to trim down their overheads and lifestyle, we are convinced that this alone will not release enough funds to finance a new minimum wage.

The challenge staring us in the face requires something far more radical and profound. The Federal and State governments are going bankrupt because an over-centralised economy that depends on oil as the major foreign exchange earner has become unsustainable. Even if oil prices rebound to the historic levels of 2012/2013, the problem will only hide for a while until the prices crash again. It is time to restructure and adopt fiscal federalism.

We should transfer the power to manage the economy from the Federal Government to the federating units, which will pay taxes to the Centre. We should also re-examine the hugely expensive Presidential system of governance. Unless something dramatic is done about the economy,we might be facing a system implosion.

FG Responds To NLC Proposal

Questions upon questions on the minds of workers, “will government agree to Labour demand?”

Ordinarily, the news should be greeted with enthusiasm, but instead, it was greeted  with scepticism. Some Nigerians express concern that they are not sure if the government would meet up with an increment in minimum wage.

Though, surprisinly, both President Mohammadu Buhari and the minister of labour and employment, Chris Ngige refused to be dragged into the new minimum wage debate as the both left out that aspect in their speech.

Perhaps, it was deliberate move by the government not to discuss it immidiately, it was one move labour leaders had early expected the president to respond to.

President Buhari in his speech assured workers of improved incentives to promote productivity. The president who was represented by the minister of labour and employment also lamented the economic challenges facing the country.

The State Of The New Minimum Wage After The Strike

Though Federal Government had proposed 45,000 naira of new minimum wage as against the 56,000 naira proposal to NLC, after the last meeting held. But the increase came with some provisions including the reduction in the number of civil servants and merging ministries and agencies.

Although many issues was discuss. Among which the president of the Labour Congress, Mr. Ayuba Wabba “I must say that the issues are beyond the price increase and dollar exchange rate.

The issues are about the totality of the corruption that has characterized the downstream sector for many decades“.

And that the federal Government should strategise means of improving her country economy.

The state of the new minimum wage is 45000 as propose by the government but the response of NLC towards it is not disclosed yet. When will that be is the question on the minds of Nigerian workers.

Considering the economic recession looming in the corner, it is highly unlikely the federal government will impliment a new minimum wage regime, recent reports shows that some states are still unable to pay workers salary and the federal government is yet to remit pension funds since september 2015.

Ultimately workers and the Labour unions will have to wait for the recommendations of the constituted 15man committee for the review of the minimum wage.