The demand for a new minimum wage of N56, 000 by Nigerian workers was finally presented to the government few days to the last May 1st Workers’ Day celebration, now the whole world is waiting to see if their expectations will be dashed or if their prayers will be answered?JOY EKEKE writes……..
Raising the minimum wage is indeed necessary if Nigeria can afford to, because while rising inflation has made nonsense of workers’ current pay, Government’s earnings has also dwindled drastically.
Today, Nigerians who are fortunate to have jobs are finding it increasingly difficult, if not impossible, to survive on their monthly pay. The major reason for this is that the pay of the Nigerian worker is not only one of the lowest in the world; it has also not improved as it should in the face of changes in market conditions. Workers in the public sector are particularly worse off.
The situation is made worse by the fact that those who work also have to support family members who form part of the huge army of unemployed and dependent Nigerians.
History of wage increase demand
This is not the first time that workers would be asking for a general upward review of wages and an increase in the National Minimum Wage. Between 1945 when workers staged the famous 45 days general strike for a Cost of Living Allowance (COLA) and 2007, when the demand by workers for a 25% general wage through the Ernest Shonekan Wage Consolidation Committee was arbitrarily cut down to 15% by Former president Olusegun Obasanjo, workers have struggled at 15 different periods to have wages improved and a national minimum wage legislated upon.
But while the struggles produced notable victories for workers and the NLC, it was usually the case that the National Minimum Wage was always set below the minimum wage needed by workers to survive. Because of the inadequacy of the wage, some state governments elected on their own to pay more. Even then, there were also some state governments that paid less than the stipulated national minimum wage. The result was that workers always could not cope.
The wage reviews were largely unstructured; sometimes negotiated wages were changed by government through circulars; at other times, government effected unilateral wage increases.
Agreements reached with government were sometimes distorted at implementation or not implemented at all by government. For example, the 2000 Wage Review Agreement provided for a further 25per cent wage increase for workers with effect from May 1, 2001, and 15 per cent wage increase with effect from May 1, 2002. This was not implemented. Following industrial dispute over this a 121/2 percent increase rather than the 35 per cent agreement in 2000, was signed in 2003. But in the end, only an increase of between 4 and12 1/2 per cent was implemented by the Federal Government. Although the
Shonekan Committee was set up against this background and recommended a 25% increase in salaries; Obasanjo unilaterally implemented a 15% increase in 2007. Government also failed to abide by the timeframes set out for subsequent negotiations with workers.
Experts propose that minimum wages should be adjusted regularly to maintain the purchasing power of affected workers in the face of price increases and to avoid large occasional shocks to the economy.
According to them the adjustment of the nominal minimum wage in the context of increasing prices is thus as important as the setting of the initial rate for a minimum wage.
President of NLC, Mr. Ayuba Wabba, while pushing for the new raise said “We all know that it is a reality that N18,000 can no longer take the workers home and cannot sustain any family. Many countries are reviewing their minimum wage upwards to meet the current realities. In Nigeria, there is even greater need to increase the minimum wage because our currency had been devalued; inflation keeps rising among others.
“What is the relation of the Nigerian currency to the Dollar or what is value of the N18,000 to the Dollar?”
Affirming the submission of the new wage demand Wabba said, “I can say now authoritatively that we’ve made a formal proposal to the Federal Government of N56, 000 to be the new minimum wage.
“The demand has been submitted officially to government and we hope that the tripartite system will actually be set up to look at it.
“Our argument is that, yes, it is true that the economy is not doing well, but the law stated that wages for workers must be reviewed after every five years.
“So, the issue must be looked into by the Federal Government and workers should not be seen as sleeping on their rights, ”he said.
He said it was imperative that the government should set up the tripartite committee for the review of the new minimum wage.
Mr. Wabba said this was the only way the representatives of unions and government would fashion out the negotiation process at a roundtable.
According to him, the logic behind the new minimum wage is to ensure that no worker earns below what can sustain him or her for a period of 30 days.
“You also know that when we negotiated the N18, 000 minimum wage, the value in terms of exchange rate at that time was almost at N110 to the dollar.
“But as at today, the value of the naira to the dollar has been reduced; and there are the issues of inflation and purchasing power, among others to contend with.
“So, it also about the law of the review of the wage, the law envisaged that within a circle of five years, there must be a review,” Mr. Wabba said.
FG not party to 5yr review deal
Interestingly the Federal Government has denied signing any agreement with organised labour for a review of the National Minimum Wage every five years.
The Executive Chairman, National Salaries Income and Wages Commission, Dr. Richard Egbule, said the issue of the five-year period for the review of the national minimum wage was part of recommendations made by a committee which were not included in the commission’s Act.
Egbule made this disclosure while speaking on Channels Television programme, Sunrise Daily.
According to him, the last review of the minimum wage was an amendment of the Act and changing of figures.
He added that there was even no law in the country which stipulates the review of the minimum wage every 10 years.
Egbule added, “The first time it (review of minimum wage) was done was in 1980. It was again done in 1990. It was again done in 2000 and lastly 2011. Of course, it was ready by 2010. So in between, there has been a period of 10 years for the review of the past ones although recently, in the last one, there were quite a number of recommendations.
“One of them was the issue that instead of a 10-year arrangement, it should be every five years, but that recommendation was not taken up and enacted into law.
“The only thing that was done was the issue of picking the figures and changing them. There are quite a number of very important recommendations in that report that were not taken.
“Even as I speak, the issue of reviewing it every 10 years was rather coincidental. There is no such law anywhere that guarantees that it should be done every 10 years. What the last recommendation did was to say that it was too long. The 10-year interval was too long; so, there was a recommendation that it should be five years, but the recommendation, which affected so many other things, was never enacted into law.
“So if anybody says, like labour is saying, that it is in the law, every five years, they have to do it, it is not correct. Probably, they are confusing this with a provision for a review of the pension every five years, whenever there is a review of salaries of workers. This is a separate issue; it is not about minimum wage.”
Two members of the National Assembly have expressed opposing views on the new minimum wage demand.
Reacting to the demand, People’s Democratic Party (PDP) Senator representing the Bayelsa East constituency, in Bayelsa State commented on the issue via his Tweeter handle where he wote: “Why should Nigerian masses who pay tax earn ₦18K while their leaders who spend it earn millions? The time to increase minimum wage is NOW!”
However a member of the Federal House of Representatives, Olajide Jimoh, of the All Progressives Congress (APC) has urged the Nigeria Labour Congress and the Trade Union Congress to tread softly with the Federal Government on the proposed national minimum wage proposal of N56,000.
He said the proposal presented should not be at this time when the country is experiencing a dwindling economy.
Jimoh, who is representing Lagos Mainland Constituency added: “nothing wrong in presenting a proposal to the federal government by labour but not at this time.”
Jimoh said when there is an improvement in the economy, the federal, state and local governments should consider the proposal and do the necessary things so that it would be easy to have an effective and efficient work force in Nigeria.
The Director of Social Communications, Catholic Archdiocese of Lagos, Msgr. Gabriel Osu, has hinged success in the fight against corruption on improved welfare of civil servants specifically a raise of the current minimum wage.
Osu appealed to President Muhammadu Buhari to look into and address the plight of Nigerian workers noting that the minimum wage of Nigerian workers was grossly in adequate.
“Except the take home pay of the average worker is able to provide the basic necessities of life, then the fight against corruption will remain an illusion,” Osu said.
How states may fare
Initially many states had insisted that it was already difficult for them to pay the current minimum wage and this led to the intervention of the Federal government who gave them loans to offset salary arrears.
The Nigerian Governors’ Forum had even hinted on plans to slash the minimum wage but were disowned by some of their colleagues.
On May 1st, governor Adams Oshiomhole announced a raise for Edo state workers from N18,000 to N25,000, thereby setting the tone for what may become non-uniform raise across the 36 states particularly among those who chose to.