Resolving the minimum wage matter
President Bola Tinubu should quickly come up with an acceptable minimum wage for Nigerian workers. The matter has unduly dragged for so long. There should be an end to it. The federal government’s tripartite committee had recommended N62,000, which was a little over the N60,000 it earlier proposed. But organised labour vehemently rejected the new offer and insisted on N250,000 as the new minimum wage. Labour’s offer marked a significant shift from its earlier stand of N500,000, which the government and the private sector opposed.
It was at this point that President Tinubu promised to consult with the 36 state governors and members of the organised private sector before arriving at the figure that would be submitted to the National Assembly in form of Executive Bill as the new national minimum wage. It did not give a date to arrive at a conclusion. The president’s position might have been informed by Comrade Joe Ajaero, the NLC president’s statement that organised labour had expected the president to reach out to the members of the tripartite committee to harmonise the figure.
The call for consultation by the president is ideal. It will enable the federal and state governments to buy time. The federal government and labour seem to be on a high horse. They need to come down to reality. Given the economic realities in the country, the proposed minimum wage by the federal government and the private sector is unrealistic. The cost of living has continued to rise since the federal government removed the fuel subsidy. The devaluation of the naira has worsened the situation. While the prices of goods and services have risen astronomically, the workers’ salaries have remained static. This has forced many workers to fall into the poverty line.
The federal government has maintained that it would be tough to meet up with the labour unions’ demands because of its earnings and huge expenditures. It is also worrisome to note that some state governments have been struggling to pay the existing N30,000 minimum wage, which came into effect in 2019. It remains to be seen how the state governors will agree to pay an improved minimum wage. Understandably, the capacity of each state government to pay the new minimum wage differs. Every state will pay according to its capacity. The local governments have opposed the proposed new minimum wage on the grounds that they lack the financial muscle to pay it.
Though Section 12 of the National Minimum Wage Act details the Ministry of Labour and Employment and National Salaries, Incomes, and Wages Commission to monitor the implementation of the minimum wage in line with the provisions of the Labour Act and the National Salaries, Incomes, and Wages Commissions Act, it is hardly enforced. This has emboldened some state governments not to pay the existing minimum wage. By October last year, about 15 states reportedly did not pay the N30,000 minimum wage.
We urge the tripartite committee to reach a compromise on the minimum wage. As it seems, the federal and state governments may find it difficult to pay the N250,000 labour unions demanded based on the prevailing economic realities. Also, it is unrealistic to pay Nigerian workers the proposed N62,000 minimum wage. The N62,000 can hardly take care of a worker for one month in today’s Nigeria due to rising cost of living. Concessions have to be made by all the parties concerned. Fixing a new minimum wage that many employers will refuse to pay does not augur well for the workers.
Another way to deal with the recurring issue of a new minimum wage every five years is to return the country to fiscal federalism where every state will determine what it pays its workers as some governors suggested. Having a general new minimum wage in a federal system of government is not the ideal. That is why some governors are yet to pay the N30,000 minimum wage. This is an issue the labour leaders should discuss further. There is even no point fixing a new minimum wage that many state governors will not be able to pay. However, dwelling on workers’ minimum wage till eternity does not bode well for the country. Let the federal and state governments quickly resolve the matter.
