The strike over new minimum wage

ON September 26, the Nigeria Labour Congress (NLC) declared a strike over the stalled process of providing a new national minimum wage for workers.  But the strike was quickly suspended after a few days because an agreement was reached to resume negotiations over the minimum wage by reconvening the tripartite committee set up to address the issue.

Earlier in November 2017, President Muhammadu Buhari had inaugurated a 30-member tripartite National Minimum Wage Committee at the Presidential Villa, Abuja, to negotiate a new national minimum wage for the country’s workers. The committee was inaugurated on the recommendation of a technical committee set up after the Federal Government increased fuel price in 2016. The parties acknowledged that the existing minimum wage in the country had expired because it no longer reflected the cost of living realities in the country. The committee, headed by Mrs Ama Pepple, former Head of Service, was tripartite and inclusive in composition. It included representatives of the state governors, the private sector and labour unions. The committee was expected to review the current minimum wage and recommend a new one that reflects the current conditions of living in Nigeria today.

That a strike was called to force the committee to reconvene and complete the negotiations shows how difficult the process has been. Indeed, the Federal Government, after waiting in vain for the governors to present a proposal for an acceptable minimum wage to the committee, decided to indefinitely suspend its deliberations.  The workers had demanded a N56, 000 minimum wage while the governors had argued that under a federal system, states should be allowed to set their own minimum wage, especially as many states were hardly able to pay the current one. Thus, there is no consensus over the appropriateness of a national minimum wage, let alone what the figure should be.

While the suspension of the strike has saved the country the tension and loss of significant man-hours that would have occurred if the strike was allowed to continue, the strike is a part of the process of resolving the disagreement between the labour unions and the government over the review of the current minimum wage law passed by the National Assembly in February and assented to by the then President Goodluck Jonathan on March 23, 2011. The process of determining and implementing a new national minimum wage has become problematic once again.

In federations across the world, national minimum wages are set side by side with those set by subnational governments.  The assumption is that because of the peculiarities of states, there is likely to be minimum wage differentials across regions.  However, the national minimum is a minimum below which no state can go. It is expected to reflect the realities of the country as a whole. But a state may raise its own minimum above that of the national minimum.

• The demand for new minimum wage

The essence of the national minimum wage is to protect the right of the worker to a decent standard of living in the country.  It is also a means of promoting a fair distribution of income. Thus, the minimum wage is adjusted through a continuous process of comparing the purchasing power of minimum wages in relation to different baskets and across the regions. Minimum wages are sometimes adjusted mid-year in periods of high inflation in countries where the process has been institutionalised. In some countries, there are several minimum wages. In such countries, minimum wages are set annually for various occupations/skills and industries.

In Nigeria, wage adjustments and minimum wages have been politicised, such that the events are usually attended by industrial actions. Consequently, inflation follows the dramatic implementation of such adjustments, and workers often lose the real wage content of the exercise to inflation provoked by the false belief that there is marked sudden increase in the volume of currency in circulation by sellers. We call on the government, as we have done previously, to systematise the wage adjustment process and ensure that they are depoliticised. This will enable wage adjustment to be part and parcel of the economic management process.  Indeed, that was why the Wages and Salaries Commission was set up.

As for the position of the Nigeria Labour Congress (NLC) and its insistence on a review of the national minimum wage, we call on its leadership to deal with the realities of governance that have made the problem challenging today, such that it required a strike to get the committee to reconvene.  There are fundamental problems of governance that need to be addressed for the process to be meaningful. Workers have wondered why the NLC that could not call a strike over state governments’ failure to pay salaries find it meaningful to call for an upward review of the national minimum wage.  The logic is that if states cannot pay the current minimum wage regularly (some states still owe arrears of workers’ salaries), how can they implement a new national minimum wage? Thus, the national minimum wage issue is tied to broader governance issues that call for urgent attention.  These include addressing irresponsibility in public financial management at all levels of government, reducing corruption and wastages, deepening the revenue collection drive of states, plugging leakages and diversifying revenue sources. These are sufficient grounds for the NLC to take action.