Labour and the burden of minimum wage

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The struggle for minimum wage for Nigerian workers took a different turn during the week when labour mobilized affiliate members for what it called total and indefinite strike. Nigerian Labour Congress, (NLC), Trade Union Congress, (TUC) and other labour centres were locked in a tripartite meeting with Organised private sector and the government. The country was on edge until President Muhammadu Buhari, on Tuesday, said, he was committed to ensuring that the nation’s workers get a new minimum wage as soon as possible.

Buhari made the promise at the Presidential Villa, Abuja, shortly after receiving the report of the New Minimum Wage from the Chairman of the committee, Amal Pepple.

Luckily, even the main opposition party, PDP, through its presidential candidate, Atiku Abubakar, said he welcomed the news that government had accepted to pay the new minimum wage recommended by the committee.

The panel recommended N30,000 as the new minimum wage for the country.

Speaking further on the matter, the President promised to immediately put in place the machinery that would address what he called open areas in the report. He will transmit an Executive Bill to the National Assembly for passage within the shortest possible time. He said, “The committee chairman highlighted some of the challenges encountered during your deliberations, especially as it relates to having a consensus position acceptable by all parties.

On the government side, the concerns raised were around affordability – that today many states struggle to meet their existing salary requirements. On the side of labour, the points raised focused on the need for any increase to be meaningful. “In a way, both arguments are valid. I want to assure you all that we will immediately put in place the necessary machinery that will close out these open areas. He added, “Our plan is to transmit the Executive Bill to the National Assembly for passage within the shortest possible time.

“I am fully committed to having a new National Minimum Wage Act in the very near future. Buhari said the government would continue to engage members of the committee as it commenced a review of the report. He, however, warned workers against being used as political weapon. “As the executive arm commences its review of your submission, we will continue to engage you all in closing any open areas presented in this report.

“I, therefore, would like to ask for your patience and understanding in the coming weeks. I, therefore, implore workers and their leaders not to allow themselves to be used as political weapons,” the President said.

Buhari said the need for a review of the minimum wage became necessary because the last review was done in 2011 and since then, prices of key consumables had increased while the most vulnerable workers were struggling to make ends meet. He said the successes recorded by the country since 2011 did not benefit the majority of Nigerians.

While presenting the report to the President, Pepple said the committee recommended N30,000 as the new minimum wage and produced a draft bill to be sent to the National Assembly on the matter. In arriving at the figure, she said the committee weighed the demands of the workers which was predicated on the high cost of living occasioned by unfavourable exchange rate and rising inflation over the past few years, among other factors

She added, “Consideration was also given to the critical role of the informal sector in employment generation and the need for a realistic minimum wage that will not stifle the growth of the sector and the overall economy.

“After carefully weighing these critical factors and bearing in mind the overriding interest of the economy, the committee, while noting the offer of N24,000 by the Federal Government, is recommending an increase in the existing minimum wage from N18,000 to N30,000.

We believe the implementation of the recommended minimum wage will, no doubt, boost the purchasing power of workers, increase consumption expenditure and ultimately stimulate business and overall economic growth.”

Meanwhile, Atiku, in a statement said he welcomed the news that the Federal Government had agreed to pay the N30,000 minimum wage.

The former Vice-President reiterated his commitment to a living wage, adding that one of the pillars of his soon-to-be-launched policy document was making workers welfare a priority. The Nigerian worker is the goose that lays the golden egg and is worthy of the best pay that Nigeria can afford,” he said.

We hope that other stakeholders like state and local governments will find courage to address this issue.  It is a problem because states have found it difficult to pay the subsisting base wage. Labour on its part should be patient with various levels of government to find a common ground. While we encourage wage increase, we urge governments to work assiduously to improve the quality and value of our money. And they must put in place measures to mitigate likely inflationary trend that may follow. Any wage increase must not be eaten up by inflation.

 

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