Opinion: Minimum Wage, Maximum Conundrum – By EMMA AGU
There can never be any question about the justification for a wage increase in Nigeria. While wages have remained constant for some time, the value of the naira has depreciated with concomitant rises in prices of goods and services. It is therefore perfectly understandable that workers should agitate for wage increase. What is debatable is the timing of the demand as well as the possibility that a wage increase, rather than improve on the fortunes of workers, could indeed worsen their situation. Besides, wage movements are not static; any wage increase will have far-reaching long term implications as it impacts on other areas such as taxes and pensions.
From their initial demand of a minimum monthly salary of N65, 000, (as against the present minimum wage of N18, 000), the Nigeria Labour Congress (NLC) and the United Labour Congress (ULC), have descended to N30, 000 which is the new bone of contention. The Federal Government has reportedly offered N24, 500 even as the Special Adviser to the President on Media and Publicity, Mr. Femi Adesina has pointedly warned that the wage increase would be difficult to implement. It is also no longer news that state governors have offered N22, 400 which the Federal Government and organised labour reportedly turned down. That leaves us with an impasse, a conundrum that is snowballing towards another strike, if labour should make good its threat to paralyze the nation starting November 6.
The entire wage saga has been one hard knot for Labour and Employment Minister, Senator Dr. Chris Ngige, to crack. Last Friday, speaking after briefing President Muhammadu Buhari and Vice President Yemi Osinbajo, Ngige assured that the Economic Management Team (EMT) would meet to reconsider the matter on Monday, October 29, 2019 with some state governors and the chairman of the Nigerian Governors’ Forum, NGF.
Flurry of meetings have taken place in Abuja and Lagos aimed at resolving the impasse. Meanwhile, labour has relocated to Lagos to perfect their strategies for the strike. For its part, Government has been engaging all parties-the NGF, the Organised Private Sector and labour. While labour insists that the Tripartite National Minimum Wage Committee set up by the FG arrived at a consensus figure of N30, 000 via a motion moved and seconded at the last meeting, the Hon. Minister of labour insists that the figure was not reached by mutual agreement and consensus as the FG delegation to the meeting had insisted on the figure of N24, 000 only.
As things stand, these groups now owe the nation the patriotic duty to arrive at a consensus that does not throw the national economy completely out of joint. To start with, everybody knows that many state governments are reeling under heavy wage burdens with many being unable to pay the present N18, 000. At the last count, only about NINE states are able to pay the minimum wage of N18, 000 regularly. The number of defaulting states would have been far higher but for the bailout funds from the Federal Government to the states. One wonders what gives labour the confidence that the defaulting state governments would conjure some magic to begin to live up to their responsibilities. If they cannot pay N18, 000, it is hard to understand how labour expects them to pay N30, 000. This demand looks like a clear invitation to chaos. Of course, the logical consequence will be the return to the retrenchment of workers, embargoes on employment and promotions especially in the public services of the states and the Federal Government. In fact the organised private sector will be off without excuse.
If the ramifications of a wage increase were to be limited to the public sector, perhaps it would have been less invidious. Unfortunately, any increase triggers agitation for more wages outside the civil service. Landlords and other service providers have not found a way of distinguishing between public servants and other tenants such as private sector workers or self-employed people who are managing to eke a living from their environment. The implication is that labour, by its uncompromising posture, may throw the nation into a bigger conundrum that it possibly could anticipate.
It is also common knowledge that, in the public service, any minimum wage increase will always have a concomitant wage adjustment from that of the lowest paid group with attendant consequential financial implications. It is instructive that the Minister of Budget and National Planning, Senator Udoma Udo Udoma has already indicated that, in the public service of the Federation, this will run into hundreds of billions of naira. Labour owes the nation the patriotic duty to weigh the frightening implications of this unfolding burgeoning impasse for inflation, redundancy declarations and unemployment indices. Besides, with the Boko Haram insurgency and other flashpoints, it is doubtful if any government would fold its arms and watch labour or any group for that matter, paralyze strategic operations of the state.
Much more importantly, we do not need a soothsayer to predict that should labour make good its threat to down tools, the minimum wage quest could precipitate the kind of maximum conundrum that will make for huge losses in the fragile economy and unnecessary deaths following closure of public hospitals.
Let’s get it straight. Labour will be failing in its duty if it does not engage employers in a manner that enhances the welfare of its members. What is debatable is whether a wage increase is the only avenue for achieving that noble objective. By the way, a worker’s salary is only useful to the extent that it can procure needed goods and services with provision for the rainy day. I will admit that today’s wage cannot satisfy immediate needs let alone provide for savings. But has labour explored or been exploring other avenues that could enhance workers’ welfare? To some extent, yes; that is, if one factors in the various effort at providing houses for workers. Yet, again, one is tempted to ask, how many workers are able to benefit from these housing programs?
The disquieting saga of toying with workers wages has gone on for far too long that there is a sense in which labour could become an accessory to the unfortunate plight of workers through acquiescence in malfeasance, selective amnesia or outright failure of strategy. Over time, what obtains is that labour would hold the Federal Government by the jugular over workers salaries. You begin to wonder why labour cannot shut down those state governments that are notorious for denying workers their emoluments, to the extent of callously compelling them to indulge in the illegality of signing away portions of their salaries and pensions. The most recent case of the misuse of the bailout fund, by some states, reeks of the most callous display of inhumanity by those in whose care the workers have been entrusted. One would expect labour not simply to paralyze such state governments but to ensure that nobody associated with them ever gets elected or reelected. It should be emphasized that the Federal Government is not the culprit here. Labour should devise strategies to make their state councils not only alive but also accountable to workers.
If governments are held accountable as advocated above, the need for higher wages could become redundant because governments that are responsive to the needs of their people will definitely lay the infrastructure for development. For instance, if state governments provide good roads, hospitals and schools and assist small holder transport companies with soft loans, the transportation nightmare that erodes the income of workers will abate. If contiguous state governments develop light rail networks, such as the one in Abuja, transportation cost will be drastically reduced. If state governments provide free education (with free books as was done by the administration of Alhaji Lateef Jakande in Lagos State between 1979 and 1983), the financial burden of educating their children and wards will be so drastically mitigated that agitation for wages could decline. But that is not happening. Instead, for many a state government, the difference between public funds and their private pockets is only a function of the type of dress they are wearing. Many are known to have raided their states in the manner of the legendary English pirates of old, on the high seas.
As we ruminate over this issue, we cannot but return to the issue of the kind of federation we choose to run. Nigeria can no longer continue to deny that the era when the government could say that its problem was how to spend money, is gone forever. Concomitantly, the federal arrangement that supported that frivolous understanding of our economic power can no longer stand. By extension, it makes no sense to have a uniform minimum wage in all the states of the federation. If different states are differently endowed resource-wise, no matter how resource is defined, then the wage arrangement must accommodate these differences and allow for each state to pay according to its ability. It is therefore left to the worker to choose the state in which to work. Anything outside this is a futile effort in self-deception and can only deepen the wage conundrum bedeviling the country.
For us to get it right, we should also shun the temptation to think that the present agitation is about Ngige or President Muhammadu Buhari for that matter lest we have the case of the angry fellow who invoked rain and thunderstorm forgetting that his mother was away to the farm. Thus, in the instant case, there is the compelling need to adopt a bipartisan approach at consensus building, in the full realisation that whatever decision is reached will be implemented by administrations that cut across party lines. By the same token, one cannot over-emphasize the need for labour to tone down on its rhetoric and threats. During their first demonstration on Tuesday, I saw some placards saying “Remove Ngige for Minimum Wage”. My immediate impression was that some labour leaders have misinformed their members because in the history of labour and productivity, Nigeria has not had a more vibrant labour minister than Ngige who, by all means, is very much qualified for the job and who has brought Nigeria back to the Governing Board of the International Labour Organisation, ILO, after 10 years exit.
Politics aside, the steps being taken by the Federal Government in the areas of infrastructure and social inclusion carry the prospect of enhancing the quality of life of Nigerians. I get amused when people say that the Buhari Administration is commissioning projects started by other administrations. One such project is the Abuja-Kaduna rail-line and the other rail projects all over the country. That will sound implausible to anybody from my town, Nsu in the Ehime Mbano Local Government of Imo State. A hospital started by the government of the defunct East Central State is lying there uncompleted. It is like Ajaokuta Steel Complex, the Second Niger Bridge before now and similar uncompleted or abandoned projects all over the country. If our recommendation to Buhari is that he should abandon the projects he inherited, then we are teaching our children the wrong things.
Back to the wage palaver; between government and labour, it is important to realize that Nigeria has technically been at war for about seven years; that the country is sitting on a fragile peace; that some moments in the history of a country call for sober reflection and sacrifice. In my view, this is one such moment. Both labour and the Government owe the people the duty of discretion: let them exercise it.