Minimum Wage and Matters Arising

Minimum Wage and Matters Arising

By Kurtis Adigba

The NLC (Nigerian Labour Congress), has called for another round of strike action to force the hands of the government into accepting a new minimum wage of N30,000, ($83.3) from the current 18,000 ($50). The dispute here, is over a paltry sum of N12,000 ($33.3), not enough, in my view to make any significant difference in the living standards of the workers.

What is Minimum Wage?

It is the irreducible minimum amount that employers of labour are bound by law to pay to their workers, both in the private and public sectors of the economy. It is the lowest bar in employees’ remuneration. No organisation is allowed to pay anything lower than the fixed amount, but they can pay higher. It is a legal guide.

Essentially, employers of labour in the private sector, (except for a few foreign-owned companies paying our local workers starvation wages), don’t have so much problem paying the minimum wage. Many pay their workers much more than the minimum wage. The problem, is majorly with the public sector. As at today, over 85% of the states and Local Government Councils, are owing workers’ salaries for periods ranging from 3-11 months at the current rate of N18,000. This happened after many of these states, had received bailout funds from the Federal Government, and tranches of the Paris Refunds! The governors, who are the main actors are offering N22,500. This is N4,500 extra. This is significantly inconsequential.

What are the Problems?

There are problems on both sides. But let me start with the labour unions and their leadership. The organised labour in the public sector, wants to eat and retain her cake at the same time. They don’t want to address the issues of productivity and the size of the work force.

Many government offices or organisations, are over-staffed. You find in some cases, 15-20 persons doing the jobs of 3 persons. Many of them, do not have clear-cut responsibility and reporting lines. They contribute nothing to the running of the operations of the offices they work. There was a case of a governor finding 12 drivers in a unit with 2 vehicles. At every point in time, 10 drivers were redundant. So, why can’t the government relieve the 10 drivers of their jobs since they are surplus to requirements? Threat of labour strikes and disruption of service by labour. The Labour unions and their leadership, must confront the reality, and adjust to what is possible. Is it not better and preferable to have the required number of workers, who will do the work, and be paid real living wages instead of the irregular starvation wages being paid by many states? The organised labour must find common grounds with the government on this issue. Workers that are surplus to requirements, should be sacked and paid their entitlements immediately to enable them set up and pursue other economic activities. This should be a continuous process. The government, do more than just paying salaries. It has responsibility for security, infrastructure, and other things.

On the part of the government, we have another set of problems. We all know that the cost of running the government at different levels are too high and wasteful. Many state governors, employ special and personal assistants that they don’t have need for beyond politics. They operate too many fleets or convoys of vehicles just for ego. When they travel abroad, or locally, they go with too many aides. So many of them also use state funds to sponsor their supporters to pilgrimage in Mecca and Jerusalem.

We know that these governors are well-remunerated in addition to the security votes that they appropriate monthly, but their feeding and clothing are still borne by the government. The school fees of their children, is the responsibility of the government. The governors are reckless and wasteful. It is the same story with the State Houses of Assembly.

At the national level, things are not different. Look at the budget proposals of the executive and the NASS. Members of NASS, are the highest earners in the public sector. We have more aircrafts in our presidential fleet than most countries with better economies and social assets. It is this waste and extravagant living standards of the leaders that is fueling the action by the organised labour. They are convinced that the government can pay N30,000 as minimum wage with better management of resources and I tend to agree with them.

The government and labour, must confront these realities and seek for solutions. Incessant strike action leading to disruption of services at great cost to the economy, is not the solution to the issue.

 

Kurtis Adigba is the Principal Partner of Kurtis Adigba and Co.

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