- Labour’s call for new minimum wage is more than a little challenging
Workers in the country once again seized the opportunity of this year’s Workers Day to renew their demand for N56,000 minimum wage. Minimum wage is supposed to be reviewed once in every five years. With the last review done in 2010, the wage had been due for a review since 2015. But this has not been possible because of the downturn in the country’s revenue, occasioned by dwindling crude oil prices. Since the country runs a mono-cultural economy, the effect has been devastating, not only for the Federal Government but also for the state governments, all of which receive monthly subvention from the centre.
The result is the inability of at least 25 state governments to meet their present wage obligations to their workers. Pensions are in arrears in some states even as capital projects have been put on hold in many others. This has been the experience since about the last quarter of 2014 when crude prices began to fall drastically. Against this backdrop, it is almost unthinkable to talk of wage increase. But then, the present N18,000 minimum wage cannot take anybody home. Its value has been seriously eroded by inflation caused by the exchange rate which had seen the naira on the downward trend until recently when the Central Bank of Nigeria (CBN) intervened by pushing more forex into the economy.
Even at that, prices of goods and services have skyrocketed. Workers, like other Nigerians, now have to pay more for food items, transportation, housing and other essential items. The same applies to pensioners. In the past, they used to collapse on queues while waiting for one verification exercise or the other as a prelude to their getting their stipends. Today, the pension queues have disappeared because there is no money to pay. Many children are either out of school or their parents are into some agreement on how to pay their school fees in installments.
Considering the totality of the scenario under which the workers live, it is logical to ask for wage increase. But then, how many state governments can afford that now when many of them cannot even pay the present N18,000 minimum wage?
The workers’ demand for pay rise is however not entirely misplaced. The ostentatious lifestyle of many of our political leaders does not reflect the hard times. The outlandish emoluments of legislators in the National Assembly, the severance package of governors and their deputies, to name only a few, is antithetical to the much-talked-about recession that the economy is in presently. Nigerian workers are not blind; they see all of these and hence, are not ready to accept that there is no money to meet their demand.
This is the crux of the matter.
Without doubt, the political leaders have to show leadership, especially in the way they spend public funds. They cannot be loosening their own belts while asking the followership to tighten theirs. But what is perhaps most important at this juncture is not necessarily wage increase but a redrawing of the income stream to bridge the wide gap between the high and low income earners. The gap can only get wider if the usual parameters are adopted in the adjustment of the present wage structure.
More importantly, we need to get governance right. Basic infrastructure that can make life meaningful for workers and the generality of Nigerians should be provided by the governments. For example, many Nigerian workers cannot own houses under the present arrangement unless they steal or do some other things to augment their pay. There should be access to mortgage and other credit facilities that can enable the workers own valuable property and pay in installments and conveniently.
It is true that wages are revised periodically in the advanced countries; it is not at the rate at which it is done here. If wages have to be doubled to make sense as it is often the case here, it means something is wrong with governance. So, let’s get governance right and other things will follow.
