The organised labour’s demand for a new minimum wage, which hallmarked the 2016 May Day, cannot be faulted, going by the country’s economic realities. And it is just as well that the Federal Government sees it as a legitimate demand. Reports indicate that the Presidency has written to the Minister of Labour, seeking his advice on the matter. A 16-member negotiating committee has also been constituted to advise on the modalities the discussion will take. This is a welcome development.
It is argued that, historically, minimum wage increases have not been a drain on businesses because they lead to greater labour productivity, lower staff turnover and more consumer spending, all of which are good for business and thus help employers pay the higher wages. On government’s table is a N56,000 demand to replace the N18,000, which came into effect in 2011 after a protracted negotiation. The President of the Nigeria Labour Congress, Ayuba Wabba, in justifying the request, noted the corrosive effect of inflation on the minimum wage. The hike in electricity tariff and the effect of escalated price of petrol pushed inflation rate to 13.7 per cent in April, according to the National Bureau of Statistics.
Economic realities apart, wage reviews have a five-year cycle, according to global labour practice. The snag, however, is that the implementation of the N18,000 minimum wage in both the public and organised private sectors has been anything but successful. This is why, across the states, families of civil servants are undergoing untold hardship, ranging from lack of food on the table to children’s withdrawal from school as fees cannot be paid, and, in extreme cases, people embarking on suicide and divorce. A total of 27 states are unable to pay salaries, leading to arrears of up to 14 months by some of them.
Wabba captured the breach in his 2014 workers’ day speech, when he said, “… those agencies of government and other private sector employers not complying with the provisions of the 2011 National Minimum Wage Act are breaking the law of the land. A government or corporate entity that refuses to obey the law of the land is surely expressing its preference for anarchy.” The point of the minimum wage is to set a foundation for broad prosperity.
Ironically, shortly after, the Nigeria Governors’ Forum unequivocally declared last November that the N18,000 minimum wage had become a millstone on their neck. According to its Chairman, Abdulazeez Yari of Zamfara State, the governors accepted the wage increase when oil averaged $100 per barrel; and it makes no sense continuing with the payment after the economy collapsed. The fall in prices of crude oil at the international market and misplaced priorities have made governance a nightmare for most governors.
Panicky and tentative in taking redemptive measures, they are content with asking President Muhammadu Buhari for bailouts. He approved the release of N713.7 billion for this purpose in July shortly after he assumed office. A second bailout request recently, which the Minister of Finance, Kemi Adeosun, dismissed, showed that such tokenism is not the appropriate solution to the enigma. But the response of Governor Adams Oshiomhole of Edo State to the minimum wage review imperative with his immediate increment to N25, 000 for the workers shows that all hope is not lost.
Amidst the cash squeeze, salaries are still regularly paid in Cross River State. The surprise gift of Governor Ben Ayade to his workers by paying their May salaries on the first day of the month should compel governors hugely indebted to their workers to do some soul-searching. As it is, Ayade’s prudent management of his state’s resources is worthy of study. Interestingly, the state is no longer a beneficiary of 13 per cent derivation as it ceded all of its oil wells to Akwa Ibom State following a Supreme Court judgement.
Therefore, we urge governors like Ayade and Akinwunmi Ambode of Lagos State, among others, to join Oshiomhole in blazing the trail of uplifting the spirit of workers with an increment in the minimum wage. Federal workers now have a guaranteed increase, as government acquiesced to the NLC request for this in the talks that led to the end of the recent strike against petrol price hike. Lagos State in particular, which surpassed its first quarter internally generated revenue target with its N101 billion gross earning, should demonstrate its economic preeminence in this case.
However, in pursuing the interests of its members, the NLC should not be blinded to the fact that a state with a backlog of salaries will be hard put to embrace an added wage burden. This is why dialogue and compromise should be veritable tools of engagement rather than belligerence and grandstanding. It can also carry out a study of states with the capacity to shoulder this responsibility right now, and then let persuasion do the work.
Indeed, central to the impecunious bearing of most states is the financial recklessness of governors; and general irresponsibility that has characterised governance in the country. Perhaps, save Lagos State, no serious effort is being made by many states to broaden their revenue base. Even those with vast agricultural assets like palm oil, cocoa plantations and state-owned industries that could be revitalised and made profitable concerns have abandoned them because of the monthly oil money shared at Abuja, which no longer flows.
It is worrisome that many states wasted their money in building airports they hardly need. States like Ogun, Osun, Zamfara and Nasarawa are yet to back-pedal from such grandiose projects despite the fall in revenue; just as bloated cabinets, aides, use of private jets inherited from their predecessors, and ghost workers still remain setbacks for governance.
The recent discovery in Oyo State that 16,000 workers were drawing multiple salaries as unmasked by the Bank Verification Number device reveals how corruption or leakages in the states can endanger their overall welfare. A shift from being conduits through which state funds are siphoned and acting as anti-graft watchdogs is a moral rearmament workers need to imbibe to safeguard their future.
