Engineering a living wage

The recent inauguration of a 30-member tripartite committee for the negotiation of a new National Minimum Wage for Nigerian workers has not only rekindled hope but also signified a firm conviction that the Federal Government is serious about pursuing the recurrent issue to its logical conclusion once and for all.

The inauguration of the committee was sequel to the recommendation of a technical committee constituted in 2016 to conceive palliative measures to assuage economic trauma and prevailing hardships, particularly as regards the dismal minimum wage of Nigerian workers.

The technical committee was a direct response of the federal government to agitations and labour unrests in the country after the increase in the pump prices of petroleum products in 2016.
President Muhammadu Buhari, while inaugurating the committee, charged the members to amicably consider the issue of a national minimum wage and all matters ancillary to it with thoroughness and concern not only as they affect the welfare of the entire Nigerian workforce, but also their ultimate impact on the country’s economy.

Review of the current N18,000 minimum wage has become imperative following the expiration in August 2016 of the 5-year period fixed for necessary adjustment as agreed between the Federal Government and organised labour unions, and upon which the unions submitted a proposal for a new N56,000 minimum wage.

The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) had adduced galloping cost of living and depreciation of the purchasing power of workers arising from the falling value of the nation’s currency as against what they were when the N18,000 minimum wage was negotiated. The exchange rate then was almost at N110 to the dollar, while at the moment, the rate is N305 per dollar.

The organised Labour has consistently insisted that reduction in the value of the naira and frightening increases in prices of goods and services have combined to weaken the present minimum wage, and as such, salaries and wages of Nigerian workers deserve corresponding increases to cushion the harsh effects of the rising cost of living.

In urging the Federal Government and other stakeholders to address the minimum wage issue, the labour unions contended that Nigeria currently pays the lowest wage to its workers in the world. It listed Argentina to be paying $6,370 per month; Algeria, $2,145; Botswana, $652; Brazil, $3,660; Chad Republic, $1,217; Republic of Congo, $1,826; Ecuador, $5,124; Equatorial Guinea, $2,618; Estonia, $6,534; Gabon, $3,043, while Nigeria’s minimum wage of N18,000 translates to a miserable sum of $59.

However, a thorny issue before the committee will be whether or not all states of the federation and the FCT should be saddled with a uniform minimum wage policy.

It was in this regard that the President said: “The subject of a National Minimum Wage for the federation is within the Exclusive Legislative List of the 1999 Constitution of the Federal Republic of Nigeria (as amended).

Accordingly, we should aim to go above the basic Social Protection Floor for all Nigerian workers based on the ability of each tier of government to pay.

“I say this because minimum wage is the minimum amount of compensation an employee must receive for putting in his or her labour and such should be anchored on Social Justice and Equity”.
Though the NLC has spurned a bill currently before the House of Representatives seeking removal of minimum wage from the Exclusive Legislative List, it would not altogether be out of place for the committee to consider the respective financial muscles of the states and ultimately liberalise the wage policy so that no state bears the burden beyond what its strength can cope with.

While it is essential that the minimum wage must be reviewed in response to prevailing economic realities, we suggest that the Federal Government should ensure that adequate cushions are put in place for states and the private sector to be able to implement the policy when an agreement is reached, and especially to stave off negative consequences, like inflation.

We applaud assurances from President Buhari that the Federal Government would, upon the completion of the assignment, send the recommendations and resolutions of the committee to the National Assembly by way of an Executive Bill to undergo thorough scrutiny before being passed into law.
However, many are worried that the Federal Government will only implement the new national minimum wage in 2019, if President Buhari is returned to power, according to a statement credited to the Minister of Information, Culture and National Orientation, Alhaji Lai Mohammed.

We are of the view that the implementation of the recommendations should not, in any way, be tied to the re-election of Mr. President in 2019. Making the implementation of the new minimum wage a campaign issue would weaken the confidence of the organised labour and the Nigerian workers in the process. We urge the committee to put its nose to the grindstone and ensure a speedy completion of the task assigned to it rather than politicising its implementation.

 

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