The fact that some states are struggling to pay N18,000 as minimum wage is fueling fears over the feasibility of meeting the demand by the Nigeria Labour Congress (NLC) and the Trade Union Congress of Nigeria (TUC) for an increase to N66,500. TOBA AGBOOLA writes on the intricacy of the issue.
The Nigeria Labour Congress (NLC) and its Trade Union Congress (TUC) counterpart are insisting on a N66, 500 minimum monthly wage.
Both unions have described the current N18, 000 minimum salary as a ‘death wage’, considering the prevailing economic realities.
But, feelers from the Nigeria Governors’ Forum (NGF), foisting a uniformed wage on the states for implementation may create problems, especially in states battling to pay the N18, 000 minimum wage.
Some of the governors argue that the states should be allowed to negotiate with the workers on their payrolls based on their financial capabilities.
There are also divergent views on the feasibility of the new minimum wage amongst workers with some saying the new wage would better their lots. Others see the proposed wage as illusory.
A civil servant at the Federal Ministry, who identified himself as Mr. Sodiq, said workers have been expecting the wage increase, adding that if President Muhammadu Buhari allows N55, 000 and N65, 000 as minimum wage to sail through, his name will be written in gold.
“We have for long suffered from poor pay and now that the organised labour is pushing for an increase in our wages, we can’t wait for it to be increased,” he said.
Another worker, Mrs. Damlong, said the civil servant monthly wage should be close to what members of the National Assembly earn.
She argued: “We that are suffering and using all our strength to do the work are supposed to be treated better than those people, who sit under air-conditioner, discuss little and they give them money with ‘Ghana must go’. They know what is good and they should give it to civil servants. That is what I want to say.”
Also speaking, Mr Ojabor, a worker on the payroll of the Lagos State government, said workers have been begging the government for a long time, on the need to increase the minimum wage. He said this is a promise by the government and it must be fulfilled.
Ojabor said: “On the issue of minimum wage, we have been begging and praying to God that as they promised to give us the increment of the minimum wage, they should fulfil it. We hope and pray that the government keeps its promise.”
Appreciating what the government’s effort so far, Mr. Ibrahim Olatunji, who teaches in a Unity School, Lagos, said: “But on the issue of minimum wage, we know that our liberal communists are asking for N56, 000, which if we look at the economic reality of the country, I think the demand is justifiable.”
Another teacher, Mrs. Victoria Yinusa, spoke of the need for an increase in what workers earn presently, considering the frightening inflation rate.
“Everything is so expensive. Even N100, 000 won’t be too much, considering what is happening in the country,” she said.
Another civil servant, Victor Ochigbo, said the Federal Government has reneged on the agreement to review workers’ salary every five years. To him, paying a minimum wage of N60, 000 will not be a bad idea.
He said: “The Federal Government is supposed to do the needful. The agreement was that every five years, the minimum wage would be reviewed upward. But, looking at it now, it is over five years and the workers are asking for that review and the government is foot-dragging.
“The government shouldn’t be foot-dragging; it should go ahead and implement a new minimum wage. Sixty thousand naira is okay because prices of things have gone up and the current minimum wage is nothing, but less than minimum wage.”
Tunde Olaogun said he is in line with N56, 000. “Labour demanded N56, 000 before. I believe that it is okay because the economy is generally bad and nothing is moving. There is no money anywhere and the inflation rate is going higher every day,” he said
The Lagos chapter of the Association of Senior Civil Servants of Nigeria aligned with the NLC and TUC in demanding N66, 500 as the new minimum wage.
Its spokesperson Akeem Kazeem stressed the need for urgent upward review of the national minimum wage. He said it was long overdue because the current pay structure in the country had become unrealistic and inadequate, such that workers could no longer meet their basic needs, a scenario that is impacting negatively on their morale.
“The sum of N18, 000, which is currently being paid as the minimum salary in the civil service is grossly inadequate. An officer at that level will, however, require about N66, 500 a month to survive. We are in total support of the demand for the sum of N66, 500 for a salary of GL. 01 Step 1 officer as requested by the organised labour,” he said.
The real economic issue according to Ayo Teriba, the Chief Executive Officer, Economic Associates, an economic research firm, is whether the current minimum wage rate is optimal or sub-optimal.
He said: “This means that do workers receive an income that allows them to live reasonably? In my opinion, if you divide 18, 000 by 30 days, that is N600 per day.
“What can anybody do with N600 per day? If you go to N56, 000, that brings it to a little bit over N1, 800; and anyone who says that figure might be inflationary is exaggerating. That’s less than what people earn as unemployment allowance in some countries. The amount is not even significant enough to affect money supply. I don’t think we should be talking about inflation.”
On the limitations of government revenue, he said, “they should find money. States are in the business of finding money to govern. If you cannot raise money, leave your seat for someone else who can.”
A financial expert, Mr. Johnson Akintunji, backed the prposed increase and suggested that it could help in improving the country’s economic fortunes.
Akintunji said: “An increase in the minimum wage allows workers to have more disposable income and that means the demand for goods and services will improve, which means consumer spending will also improve and in return stimulate business activity, in the sense that those businesses involved in producing the goods and services will need to produce more.
“But because a lot of production is not domesticated, there might also be a trigger in the increase in demand for foreign exchange for importation. But, on a balance, I think an increase in wages will trigger positive economic activity as a result of the increased demand for goods and services.”
He, however, noted that the increased burden on the government and some entrepreneurs might dampen the demand for labour. He said the N66, 500 is not really feasible, but the government can do far better than N18, 000
The financial expert argued: “It also means that some states will be forced to retrench and it will discourage a lot of small companies from employing because they may not be in a position to meet such obligations.
Going by the situation in the country, it may be hard for the government to agree to N66, 500, but they can do far better than N18, 000.”
The General Secretary of the Senior Staff Association of Statutory Corporations and Government owned Companies (SSASCGOC), Ayo Olorunfemi, N66, 500 minimum wage is inconsequential to the cost of living in modern times.
Olorunfemi said that N66, 500 demand by labour leaders is and too small, adding that they can do better. According to him, the minimum wage is long overdue, stressing that whatever the government agrees to should have been done long time ago.
He said: “Where lies our hope as workers toil day and night? Now we are talking about minimum wage, do you see the minimum wage being increased? I can tell you from here that rather than increase, it is going to be reduced.
“The NLC and the TUC that formed the negotiating team have requested for N66, 500 as the new minimum wage, that equals to N18, 000 in 2011. Are we increasing or decreasing? Do you think the Federal Government will also wake up and say we are giving you N66, 500?
“They will negotiate it and at the end of the day maybe they will submit whatever figure, but whatever figure they would arrive at is a minus to what we were getting in 2011.
“When we get that, some people would say hurray we have done something good, and we are there as labour leaders thinking we have done something for the workers. We really need to know where we are coming from so that we know where we are and determine where we are going.
“Calculate what N18, 000 will buy in 2011, put it side by side with what N66, 500 will buy today. As at 2011, a bag or rice was sold between at N6, 000 and N7, 000, but today, it is being sold at N15, 000, divide that bag of rice by a family of four.
“Look at the price of food stuff generally, transportation and the amount spent in fueling our vehicles for those who own cars. When you put all these expenses in a month together, you will realise that it is more than N66, 500. So, what commitment are we talking about? Commitment to make us stagnant?” he asked.
The governors’ position
Not a few states are finding it difficult to meet their obligations on the existing minimum wage.
Financial experts as well as organised labour argue that the time has come for governors to be creative in the management of public finances, rather than perpetuating the defeatist practice of blaming their predecessors for the present state of affairs.
They said that since the governors are not planning mass sack in order to meet the pending obligations to be placed on them by the new minimum wage, they must put on their thinking caps to grow their revenue profile. Governors must demonstrate renewed commitment to cutting costs and eliminating wastages in the system, their said.
A labour activist, Sunday Adebayo, said: “Every worker deserves to live decently and so, the Nigerians worker must earn a decent wage. But, the government must also ensure that the economy becomes productive.”
Except Gombe State Governor Ibrahim Dankwambo who pledged readiness to pay N28, 000 as minimum wage, before the tripartite committee submitted its report, there was no commitment from any other governor.
There is palpable fear that complaints about paucity of funds, lack of political will and bickering among labour leaders on an agreeable amount may frustrate the implementation of a new national minimum wage.
According to Rivers State Governor, Nyesom Wike, Nigerian workers would be better off if states were allowed to fix their separate minimum wages in line with their financial capacity.
Wike, who spoke in Port Harcourt during a public hearing on the new national minimum wage for the Southsouth, explained that a uniform minimum wage was unrealistic because states varied in financial capacity.
He said: “And for us therefore, the single national minimum wage system is yet, another lie that betrays the distortions in our federation and the structured dislocation of the states in the power equation between the Federal Government and the federating states.
“It is our view that the country and its workers will be better off if states are allowed to fix and pay their own minimum wages indexed to the prevailing cost of living and ability to pay.
“When this happens, it is possible that some states may go beyond the minimum threshold to pay a living wage, which is what our workers truly need.”
The governor pointed out that the previous review failed to give maximum weight to the existing disparity in economic potential and capabilities among the 36 states of the federation, adding that it has been difficult for most of the states to implement the existing N18, 000 minimum wage.
He noted that majority of the states were within the fringes of financial viability and could not meet their salary obligations to civil servants without bailouts from the Federal Government.
Wike explained that enhanced wages could only be possible when the Federal Government improved the economy of the federation.
He said: “Here in Rivers State, we value our workers; we invest in their welfare in different ways and we want them to earn living wages that can keep them and their families as comfortable as possible.
“The Rivers State government, therefore, supports the ongoing consultations by the Tripartite Committee on National Minimum Wage for arriving at a new national minimum wage floor for the country.”
Governor Aminu Bello Masari of Katsina State, however, gave a general advice to workers – they should demand for an improved standard of living from the government instead of calling for a new minimum wage.
Masari argued that an increase in minimum wage without improvement in standard of living will make no impact.
The governor urged the workers’ unions to “look at the fundamental issues that make salary meaningful, which include minimum standard of living that will make an average man live in peace. Talk about education, water supply, access roads, health, shelter and security. No development without peace because the moment salary is increased, everything will be increased.’’
In his contribution during the public hearing, Akwa Ibom State Governor Emmanuel Udom called for a review of the revenue sharing formula.
Represented by Ekerebong Akpan, the State’s Head of Service, the governor described the present minimum wage as inadequate for the workers.
Udom said: “Today, workers’ wage cannot take them home. There is the need to note what each state can pay.”
According to Udom, government will be able to “absolve” the difference between the N18, 000 minimum wage and the proposed N66, 500.
He said the Federal Government could increase workers’ salary without publicity, adding that it could be done without announcing it.
Also responding to a question on the possibility of Lagos paying a higher minimum wage, the state Commissioner for Establishments, Training & Pensions, Benson Akintola Oke, said it was within the purview of Governor Akinwunmi Ambode-led administration to decide what to pay workers in the state public service.
Arguing that federalism was not well-structured, he said that each of the federating units ought to operate independently, but in synergy with the federal where both have concurrent responsibilities.
At the last 107th session of the International Labour Conference (ILC) in Geneva, Switzerland, the organised labour re-affirmed its readiness to use every available means under labour laws “to confront the Federal Government, if it attempts to shift the implementation of the new minimum wage beyond September.”
NLC President Ayuba Wabba, who dropped the hint, declared that the rank of the working poor in the country was expanding, exacerbating household, generational and gender poverty.
Speaking at the same forum, Labour & Employment Minister Chris Ngige maintained that the implementation of a new minimum wage could not commence by the end of September.
According to him, the tripartite committee, working on it would only complete its work in September and submit its report and recommendation to the government for consideration.
But, Wabba, who was the leader of workers’ delegation to the ILO conference, said the NLC and the TUC will tackle the government with any other means legitimately allowed by law, if it failed within the stipulated timeline.
The labour leader’s remarks were contained in his address before the ILO General Assembly.
He said: “Mr. President, the rank of the working poor in Nigeria is expanding, thus exacerbating household, generational and gender poverty. One of the reasons for this is because wages are low, depressed and deflated.
“Given that minimum wage administration has been proven as a time-tested tool to stem wage downward spiral, the NLC is currently engaged in tripartite minimum wage negotiation with the government. We remain eternally vigilant to ensure that the process is successfully concluded within the stipulated timeline by the government of the federal republic of Nigeria.”
Fielding questions from reporters after his presentation, Wabba said the labour body has many ways of responding to issue, adding that both the NLC and TUC will consult their organs to address the issue in their own way.
On the exact step labour will take, he said: “We have many ways of responding to issues and as we progress in the process, we will consult our organs and constituents and will be able to push the process through any other means that is legitimately allowed by law.
“I don’t want to keep repeating myself. I have told you that at the tripartite committee, we are all committed to a timetable and timeline which are known and which everybody is aware of. So, labour, represented by NLC and TUC is committed to following that timetable and timeline.”