|
Getting your Trinity Audio player ready...
|
Today is worker’s day and it is going to be the last worker’s day before the 2019 elections.
As Nigerian workers come out to celebrate this day, they are certain to hear the government and organised labour start another rhetoric around minimum wage and promises about putting in place a new minimum wage structure before 2019.
It is an old trick that workers all over the world tend to fall for. The lure of ever increasing salaries is very difficult to resist.
Several figures have been bandied around about what will be the new minimum wage, which at current levels of N18, 000 per month is a pittance.
Already, public hearings are being conducted on the proposed minimum wage. Chris Ngige, Minister of Labour and Employment, is dreaming of leaving a higher minimum wage as his legacy having not achieved much in his almost three years as a minister.
Ngige at the Public Hearing on Minimum Wage for the South-South Zone in Port Harcourt, Rivers State said Minimum Wage being a federal law as contained in section 34 of the Constitution, “means a price floor below which workers may not yield their labour.” “Above that floor, any state can pay as high as its resource capacity accommodates.”
The Nigeria Labour Congress (NLC) in joint proposal with the Trade Union Congress of Nigeria (TUC) are pushing for N66,500, as against N93,000, proposal submitted by the United Labour Congress (ULC).
All of the unions have rightly cited inflationary trends, depreciating value of the naira, high cost of living and transportation in the absence of efficient and organised public transportation system, as reasons why the Federal Government should see the urgency to review the N18,000 national minimum wage.
Agnes Sessi, chairman, political committee, NLC, Lagos State Chapter, at public hearing on the minimum wage last week, said the current wage structure could not sustain any worker at this critical period in the nation’s economy. And she is right.
In her opinion, the N66,500 new minimum wage would lift the workers out of the poverty trap and would conform with the International Labour Organisation (ILO) standards on minimum wage to meet the needs of workers and their families.
But Sunday Esan, representative of ULC believes the minimum wage should even be higher. In his submission, he said N93, 000 must be the benchmark. He argued that N18,000 translates to $50 per month for an average worker and this placed Nigeria among the least paying country in Sub Sahara Africa when compared to South Africa ($517); Ghana ($128); Gabon ($418); Kenya ($331); Ethiopia ($77) and Tanzania which pays $149 as minimum wage.
While the workers have a strong a case for a higher minimum wage, there is also the other side of the argument, which in a pre-election year; the government is reluctant to admit.
They do not have the funds to pay a higher minimum wage. It is estimated that the country’s 36 states have a total wage bill of about N2.6 trillion per annum. Yet annual internally generated revenue is just below N1 trillion, with about 40 percent of it accounted for only by Lagos state.
A recent report by Economic Confidential show that 17 states have internally generated revenues that is less than 10 percent of their federal allocations.
Without federal allocations, these states cannot sustain their operations. With the current N18,000 minimum wage, it is a fact that most states exist to pay salaries with little or nothing left to provide critical infrastructure.
The story is not different at the federal level, where the government basically borrows to pay salaries.
Budgeted personnel cost in 2017 stood at N1.9 trillion.
When other personnel related costs are added at the federal level, the total cost balloons to N2.99 trillion, representing about 59 percent of government total projected revenues in 2017.
The Federal Government is only able to sustain these payments and meet its other obligations by tapping generously from the domestic debt markets, a luxury that is not available to most states.
Current revenue reality shows that the government cannot afford the higher minimum wage, no matter the public posturing.
Higher minimum wage will only be implementable, if it is followed by a right sizing of the country’s labour force.
Right sizing the labour force is not politically popular topic, so it is a discussion that is avoided but it represents the sad reality of the current situation. Labour can have a higher wage but it will come with a downsizing of the labour force. This should happen. The country actually needs a leaner and more productive workforce earning higher wages. This also means trimming and aligning agencies and parastatals in line with current realities and opportunities.
BY OUR REPORTERS
