Minimum wage, Govs and N30,000 demand

In the last few months, stakeholders in the Organised Labour have been involved in back and forth negotiations over the new minimum wage to be paid by employers to the working population in the country.

Though the negotiation for upward review of wages in the country is long overdue with about two years, news emanating from the negotiation table seems to suggest that some of the employers are not yet ready for wage increase.

When the prevailing wage of N18,000 was agreed upon in 2010 and took effect and followed by the National Minimum Wage Act (amendment) 2011, the understanding was that the next review will take place in 2015 in line with the provisions of the law.

It is evidently clear as it is today that the current economic realities do not favour continuing to keep the current minimum wage, this is in addition to the fact that continuing it is in clear violation of the laws of the land, which those in government swore to protect.

So, it was understandable that the Nigeria Labour Congress (NLC) and its affiliates after viewing the body language of government at the negotiating table, because the organized private sector had quickly met a common ground with the Labour, and saw no seriousness in meeting their demands, called its people out for a warning strike.

But the National President of NLC, Ayuba Wabba, announced the suspension of the strike, saying labour decided to suspend the strike following a “firm and formal invitation” by the Federal Government to reconvene the tripartite committee on national minimum wage.

The strike was called because since its inauguration in November 2017, the committee was unable to meet to complete its assignment and make recommendations to the government on a new minimum wage.

After much negotiations however, the tripartite committee recommended N30,000 minimum wage to the President for onward transmission to the National Assembly to pass an amendment bill on the minimum wage.

This was done to avoid a strike which was imminent the next day after Labour sensed that they were being taken for granted.

But shortly after the committee recommended N30,000 as new minimum wage to the President, the Nigeria Governors Forum kicked against the recommendation on the grounds that the amount was unrealistic, saying that they lacked the capacity to pay.

The governors claimed that the Ama Pepple led tripartite committee did not wait for its position on the matter before submitting its recommendations to the President, noting saying if the N30,000 is to come into effect as the new minimum wage, they may be forced to downsize the work force in order to be able to pay.

But, the committee denied the accusation that they did not wait for the governor’s position, insisting that indeed the governors sent in their position paper and that it was on the basis of that it made its submission to the President.

It will be noted that during the negotiation process, the Federal Government proposed N24,000 minimum wage, States proposed N22,500, while the organized private sector proposed N30,000.

Now, the governors have raised a panel of eight to meet with President Buhari on its misgivings on the N30,000 as minimum wage.

Governors of Lagos, Kebbi, Plateau, Bauchi, Akwa Ibom, Ebonyi, Enugu and Kaduna states are on the panel to meet with the President.

The argument of the governors against the N30,000 minimum wage is that they do not have enough resources to meet that rate as a minimum wage of workers in the various states, noting that many of the states will go bankrupt should they be compelled to pay.

They further argued that because of the paucity of funds across the various states, it is only Lagos State that is viable enough to pay N30,000 and still be able to meet some of its other obligations and that if they are to pay salaries and still be able to meet other needs, then the amount must be reviewed downward significantly.

Some analysts have also argued that the cost of living across the states are not the same and therefore states should not be compelled to pay the same amount of salary as minimum wage to its work force.

While all these arguments seem reasonable, it must be said that in today’s Nigeria, anyone who would want to pay a worker any amount lower than N30,000 can only be described as wicked.

While it may be true that many states are not financially solvent enough to pay N30,000 as minimum wage, a state like Edo State that is not among the oil producing states of the country have been paying well over the current N18,000 and even well over the N22, 500 minimum wage that governors now want to pay. The question is how are they able to do that.

It must also be noted that no one is asking governors to pay the same minimum wage of N30,000 nationwide, it is that they have a right to fix their minimum wage but it must not be lower than N30,000.

It must also be noted that governors across the country earn the same salary irrespective of the financial strength of their states as fixed by the Revenue Mobilisation Allocation and Fiscal Commission and none of them has decided to reduce their salary because they don’t spend as much as other states.

There is need to call for sincerity on the part of the governors and advise that rather than fight Labour on the N30,000 minimum wage, they should begin to look at areas they can cut cost and reduce cost of governance to meet today’s realities.

We are of opinion that if Edo State can be among the states in the country today with the highest Internally Generated Revenue (IGR) and so able to pay in excess of the minimum wage without owing its workers, many of the states owing today can do better and even pay the N30,000 without owing if they decide to look inward.

We submit that the IGR of Lagos State in 1999 when Asiwaju Bola Tinubu was inaugurated as governor was in the region of N600 million, but through some financial engineering and innovations , Lagos is what it is today with billions of naira IGR.

We are of the opinion that other states can achieve same success if they will be a little bit more innovative rather than wait on the centre at all times for monthly allocations.