Arriving at a new minimum wage

LAST Monday, President Muhammadu Buhari inaugurated a 30-member tripartite National Minimum Wage Committee at the Presidential Villa, Abuja, to negotiate a new national minimum wage for Nigerian workers. According to President Buhari, the committee’s inauguration followed the recommendation of a technical committee set up after the Federal Government increased fuel price in 2016. Acknowledging that the current minimum  wage in the country had expired, Buhari said that after the completion of the committee’s work, an executive bill would be sent to the National Assembly for scrutiny before its passage into law.

The committee, chaired by a former Head of Service, Mrs Ama Pepple, has among its members the governors of Imo, Osun, Kebbi, Plateau, Rivers and Gombe states. It also has representatives from the Nigeria Employers Consultative Association (NECA), Manufacturers Association of Nigeria (MAN), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small and Medium Enterprises (NASME). The ministers of Finance, Labour and Employment, Budget and Planning;  the chairman, National Salaries, Income and Wages Commission; the Head of the Civil Service of the Federation and the Permanent Secretary, General Services, Office of the Secretary to the Government of the Federation, are all part of the committee. The Nigeria Labour Congress, (NLC), Trade Union Congress (TUC), Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Nigeria Employers’ Consultative Association (NECA) and the Federation of Construction Industry (FOCI) are also represented in the committee.

As should be clear from its membership, the committee is balanced, being fairly representative of the key stakeholders  that should normally be involved with the delicate task of negotiating a new minimum wage for workers. Going by the cost of living and other key economic indicators, the current minimum wage of N18,000, negotiated during the immediate past administration of Dr. Goodluck Jonathan, is outdated. This is why the labour unions have, for some time now, been demanding a new wage regime that will be reflective of the economic situation in the country. While this demand whose justness has now been affirmed by the government cannot be faulted, it is nevertheless necessary to warn that whatever is eventually worked out must reflect the diversity of the committee. In other words, the eventual figure must reflect a consensus between the public and private sectors of the economy. It will amount to a sheer waste of time to enact a new national minimum wage that only the Federal Government or the states can pay. The law is clear that any employer who has up to 50 workers on his or her payroll must pay the national minimum wage. But for the private sector to be able to pay the new wage, it has to be taken into confidence, which is why we urge members of the National Minimum Wage Committee to consult widely among their constituencies rather than assuming a know-it-all attitude.

In the same vein, the new minimum wage should also reflect geographical location and cost of living. For instance, the cost of living in a place like Gusau, Zamfara State, is different from that in Port Harcourt, Rivers State, and so we expect such a difference to be factored into the new figure.  Sadly, the majority of the state governments are finding it difficult to pay even the extant minimum wage that President Buhari said has expired. Therefore, since they are presumably not planning the mass sack of workers in order to meet up with the obligations that will be placed on them by the new minimum wage, the state governments must work assiduously towards increasing their revenue profile. They must demonstrate renewed commitment to cutting costs and eliminating wastes in the system. This is indeed the time to be creative in the management of public finances rather than perpetuating the defeatist practice of blaming previous governments for the present state of affairs. The fact is that previous governments, in spite of their shortcomings, also faced very difficult situations.

Every Nigerian worker deserves to live a decent life and so must earn a decent wage. But the government must also ensure that the economy becomes productive. In addition, and perhaps more importantly, we urge the government to embrace the restructuring imperative. The truth is that the nation’s workers will fare better under a system that allows each component unit of the federation to take charge of its affairs and creatively harness its God-given resources. The healthy rivalry that will be created by such a system will encourage rapid development. For the moment, though, we wish  the National Minimum Wage Committee success in its critical assignment.