Some mischievous individuals are saying in jest that the Minister of Labour of Employment, Dr. Chris Ngige, is pint-sized, and that he acts like Goofy, one of the dwarfs who took in Snow White, the princess who was set free by the kind huntsman after her stepmother, the Wicked Queen, had instructed that she be taken to the forest and killed.
The minister is certainly out of his depth with the existentialist issue of deriving a realistic minimum wage for Nigeria’s shortchanged and longsuffering workers. He took refuge in a Draft Federal Government White Paper that has the rather longish title of “Report of the Technical Committee on Industrial Relations Matters in the Federal Public Service.”
The labour unions have taken the initiative from him: Ayuba Wabaa, National President of the Nigeria Labour Union, stole Ngige’s thunder, in announcing that a tripartite committee of the Federal Government, state governments, and organised private sector, had agreed to pay the N30,000 minimum monthly wage proposed by labour. Ngige laboured out a hasty rebuttal.
The statute books require the review of workers’ wages to be done regularly, but guided by movements of the Consumer Price Index. As you know, CPI, which reflects cost of living, is derived from changes in the rates of inflation and of currency exchange.
There is cause to celebrate now that the National Bureau of Statistics has finally admitted that inflation rose, even if it is just by 0.03 per cent, from 11.25 per cent in August 2018, to 11.28 per cent in September 2018.
Observers think that the consecutive decline in inflation rate reported in the 18 months from early 2017 to mid-2018 was a fluke, “invented,” and pushed into the public domain by the NBS to work on the behalf of government that is not quite interested in any upward review of workers’ minimum wage.
Economics textbooks define salary as compensation for services rendered by workers. But management experts have gone into more specifics by adding that salaries and wages are paid for the energy, time, and skills used by the worker to achieve the objective of their employer.
Those, who are minded to the hygiene of definition, say that salaries are paid to white collar workers, while wages are paid to blue collar workers. In economics, labour is regarded as one of the major factors of production. The others are land, capital, and the entrepreneur.
Economists, from Adam Smith, to Ricardo, and even Karl Marx, agree that the “amount” of labour used in producing a product is the basis for determining the value of such a product. It would appear that payments compensate the “effort” that went into making land, capital, and entrepreneurship productive.
Of course, this theory does not deny the other theory that utility, or the ability of the product to satisfy a human need or want, is important to determining the value of product. The utility or utils, to use the nomenclature most preferred by economists, undergirds the interplay of demand and supply, and the “rational” arrival at the price of a product.
The reality of the equilibrium price of labour informs the decision by the labour unions that initially demanded N90,000, to scale down to N30,000 minimum wage per month, an amount still unworthy of the lowest labourer in Nigeria.
Counter offers made by the private sector, the Federal Government, and the state governors are N25,000, N24,000, and N20,000 respectively. The organised labour threatens another strike from November 6, 2018 if its demands are not met.
It would be an understatement to say that the unimaginative Nigeria Governors’ Forum dreads any increase in the minimum wage. Not too surprisingly, their Chairman, Governor Abdulaziz Yari of Zamfara State, argues that it is not so much about fixing a minimum wage, but finding the “ability or resources to take care of that agreed minimum wage.”
He adds: “As we are talking today, we are (still) struggling to pay (the) N18,000 minimum wage… Some of the states are paying 35 per cent, some, 50 per cent, and still some states have salary arrears.” He, however, neglected to say that the Federal Government paid Paris Club refunds to enable states pay outstanding salaries.
The manner in which the resolution of the workers’ minimum wage is being handled shows that no one quite knows what to do. An impatient Francis Johnson, National President of Petroleum and Natural Gas Senior Staff Association of Nigeria, wants the matter of the minimum wage concluded before it gets lost in the 2019 electioneering that is about to commence.
Yari probably also needs to be reminded that Section 16(2)(d) of Nigeria’s Constitution provides that, “The State shall direct its policies towards ensuring that… reasonable national living wage, old age care and pensions, sick benefits and welfare of the disabled are provided for all citizens.”
Unconfirmed reports indicate that senators earn N36 million per month, and a member of the House of Representatives earns N25 million per month. How they can earn these outrageous sums, while workers who voted them into the unproductive National Assembly earn N18,000 monthly is beyond comprehension.
While the Federal Government is “homing and hemming” about the minimum wage, the Executive Director of Muslim Rights Concern, Prof Ishaq Akintola, laments that the average Nigerian worker has $300 per capita income, which averages to living on roughly $1 per day. He thinks the average Nigerian worker is “overworked, underpaid, and overtaxed.”
Former Vice President Atiku Abubakar, presidential candidate of the Peoples Democratic Party, was long on the argument that N18,000 monthly salary was ill-motivating and embarrassing, but surprisingly short on suggesting what should be paid. Renegade former PDP Chairman Modu Sheriff, who promised that the PDP would raise the minimum wage if voted into office in 2019, didn’t say how much they’d pay.
In 2011, an amendment to the National Minimum Wage Act was passed to increase minimum wage from N7,500 to N18,000. Economic entities that are exempted from paying the minimum wage are those that employ less than 50 workers, part-timers, and commission staff.
Section 3 of the Act provides that “An employer shall pay to the workers a wage not less than the minimum wage…and if the employer fails to do so, he is guilty of an offence, and is liable on conviction to a fine.”
The International Labour Organisation defines minimum wage as “The minimum amount of remuneration that an employer is required to pay to wage earners for the work performed during a given period, which cannot be reduced by collective bargaining or an individual contract.”
The ILO requires that the minimum wage should protect workers from unduly low wages, ensure a just and equitable share of the fruits of a nation’s progress, and guarantee a minimum living wage to all who are employed and in need of such protection.
You wonder why the Nigerian state is acting contrary to, and in breach of, the social justice position of the Minimum Wage Act of 2011, the Nigerian Constitution, and the ILO statute that require living wages and protection of workers.
Those state actors and their cahoots who advance the bogey of inflation to deny the rather unambitious N30,000 minimum wage demanded by organised labour have demonstrated their lack of capacity to devise a viable economic development path for the Nigerian nation. They should be shown the way out.
Twitter @lekansote1
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