Issues in minimum wage strike

JOHN NWOKOCHA reviews issues in the recent nationwide labour strike caused by demand for implementation of new national minimum wage, which culminated in three days tango between the federal government and Nigerian Labour Congress (NLC)]
Minimum wage, agitation, strike Between midnight of Wednesday, September 26 and Friday, September 29, economic activities were grounded nationwide because the leadership of the Nigerian Labour Congress (NLC) and its affiliates commenced its seven-day warning strike to drive home its agitation for the implementation of a new minimum wage.

The President of NLC, Comrade Ayuba Wabba had said while directing its members and affiliate unions on the steps to toe on the strike that the industrial action was necessary due to the refusal of the federal government to reconvene the meeting of the tripartite national minimum wage committee to enable it to conclude its work.

Wabba said, “In compliance with this mandate, all workers and private sector at all levels across the country have been directed to comply.

“All public and private institutions, offices, banks, schools, public and private business premises, including filling station, are to remain shut till further notice”.

It is no longer news that the workers are demanding a new minimum wage of about N50,000 from the current national minimum wage of N18,000.

Blueprint recalls that the organised labour had held a meeting with the Minister of Labour and Employment, Dr Chris Ngige, in Abuja, on Wednesday, a few hours before the commencement of the industrial action but the meeting did not produce the expected outcome.

30-member tripartite committee Also, Blueprint recalls that at the inauguration of a 30-member tripartite committee on minimum wage in November 2017, President Muhammadu Buhari urged them to work towards a new minimum wage all tiers of government would be able to pay.

Buhari also touched on the issue of minimum wage being under the exclusive legislative list in the 1999, and not the concurrent legislative list.

This puts the issue under the control of the federal government.

But reacting to the statement by Wabba that labour took its action due to refusal of the federal government to reconvene the meeting of the tripartite committee, Ngige said the work of the committee was stalled following some state governors’ reluctance to submit their proposal on a new wage system.

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The minister stressed that without inputs from the governors on the issue, there cannot be any agreement on a new minimum wage.

Revenue sharing formula The minister may have implied that it was necessary to give states capacity to shoulder the minimum wage obligations regularly, hence, the governors have been asking for a review of the existing revenue sharing formula.

The formula in question gives federal government 52.68 per cent of total revenue from the federation account, the 36 states and the Federal Capital Territory (FCT) 26.72 per cent and the 774 local governments 20.6 per cent.

All things being equal the tripartite meeting should reconvene on October 4.

Ngige had reportedly said after the meeting with labour leaders that the tripartite committee would resume negotiations on October 4.

Hear him, “We are resuming precisely on Thursday, October 4, and the meeting can spill over to October 5.

All the processes have been put in place and labour leaders know; they are now expected to communicate such to their organs; so we don’t have any need for a strike”.

On consultation over new minimum wage with governors, Ngige said it would be done when the tripartite committee resumed, explaining that the government was still consulting with other stakeholders.

According to the minister, “Part of our consultation means the economic management team would have something to work on.

Already, they are working on it, the National Salaries, Incomes and Wages Commission is working on it and it is expected that before the October meeting, they would have been through with work.” Ngige stressed that a bill would still have to go through the National Assembly after approval by the Federal Executive Council.

The current N18, 000 minimum wage came into effect in 2010.

The wage became due for another review since 2015, in line with the provisions of the National Minimum Wage Act (Amendment) 2011.

Although some state governments find it difficult to pat the current N18,000 minimum wage, the present economic realities make implementation of the new minimum wage urgent.

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Spiraling inflationary rate Said a developing economic expert, Dr Ugo Anene, “evidently, whatever indices or parameters used to arrive at N18,000 in 2010 must have become grossly obsolete”.

Commenting on the strike, Anene said it was glaring that spiraling inflationary rate in the country, has compounded the hardship of the Nigerian worker since the last review in 2011.

According to a recent check by Blueprint, the rate of inflation in the country has remained high and worrisome.

Take for instance, in 2011, Central Bank of Nigeria (CBN) data showed inflation at about 10.8 per cent, with exchange rate of the Naira to the dollar averaged between N151.96 and N155.26.

Also, the country’s gross domestic products (GDP) stood at about $411.7 billion and GDP growth rate at about 8.2 per cent.

A release by the National Bureau for Statistics (NBS) shows that in second quarter of 2018, the inflation rate stood at 11.23 per cent, with exchange rate of Naira to the dollar at N306.25, or N362 in the parallel market.

GDP is estimated at $375.77 billion since 2017, growing at the rate of 2.9 per cent.

Of course, experts and stakeholders at different occasions have canvassed living wage whenever the issue of minimum wage is debated in the country.

What this implies is that in computing minimum wage due consideration must be given to the prevailing cost of living index, inflationary trend and capacity of employers to pay.

Another implication is that a living wage is based on the belief a worker should earn enough income to afford the basic living cost of his family.

Put in another words, living wage should take care of the worker’s food cost, housing costs, transportation costs, tax/contribution costs, children education and medical costs.

In view of the basic costs, in approving minimum wage according to experts consideration must be given to all the essential needs of the worker and his family.

Stakeholders’ fears Sadly, NLC disclosed recently, that 33 states and the Federal Capital Territory FCT are owing various months of arrears of salaries to their workers at N18,000 per month.

Labour said, “Not even the so-called oil producing states that receive additional derivation revenues from the monthly federation account allocations have been able to meet this obligation”.

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Nevertheless, for some stakeholders the real issue is sustenance of wages that employers paid their workers.

In the private sector in Nigeria, the debate on minimum wage and consequent warning strike seemed to be a non-issue.

Some private sector operators act like laws unto themselves.

Suffice it to say that they are an island of sort.

They neither comply with the provisions guiding minimum wage nor pay their workers salaries that have been agreed on.

This explains why arrears of salaries is common place in the private sector.

In some private organizations, according to Blueprint check, workers are owed salaries ranging from three months to seven months.

But to an economist and chief executive officer, Economic Associates, Ayo Teriba, the real issue in the minimum wage debate is no more whether the demand is necessary, but whether N18,000 take home pay will “take the workers home and allow them live reasonably”.

“Divide N18,000 by 30 days, that comes to N600 a day.

What can anybody do with N600 per day?” he asked.

At N56,000 (the initial figure labour proposed), he said this would translate to a paltry N1,866, an amount he says is not even up to what some less endowed countries pay their citizens as unemployment allowance.

However, considering the nation’s spiraling inflation rate, experts say a higher minimum wage would push the inflation rate further leading to hyper inflation in the economy.

Interestingly, NLC’s demand for new minimum wage is based on the rising inflationary trend.

In view of the economic variables, some stakeholders are proposing what they called a realistic minimum wage of N30,000 per month.

In suspending the strike Wabba, said labour took the decision following a “firm and formal invitation” by the federal government to reconvene the tripartite committee on national minimum wage on Thursday.

As the tripartite committee reconvenes it is necessary for labour to look deeper at the real issues and ensure that at the end of their negotiation Nigerian workers will smile and not shortchanged.

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