FG, states and NLC’s N615,000 new minimum wage

The N615,000 new national minimum wage proposed by the Nigeria Labour Congress (NLC), which is currently awaiting negotiation and endorsement by the stakeholders, is seemingly outlandish, but not far off the economic realities and daily pressure on Nigerian workers.

We reckon that increasing the minimum wage threshold by a whopping 2000 per cent may worsen the already bad inflation and mount additional pressure on the private sector.

Still, the most untenable pushback is the acclaimed insolvency of the states, whose governors are openly profligate, to pay a living wage for their workers. To ensure a fair balance in scale and prevent an industrial crisis, all the parties must come to the roundtable to negotiate a fair wage that will not be short of the sacrifices the political class is willing to make in the general interest.

After an initial disagreement between the two leading labour unions, the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), on the right living wage for Nigerian workers, the duo recently reached a consensus of N615,000 minimum wage threshold. The benchmark is significant, coming from the N30,000 currently being paid and with a lot of struggle by some states to pay it.

President of the NLC, Joe Ajaero, noted that fuel subsidy removal and the ripple effects are determinants of the new eye-popping minimum wage demand. While it is still open to negotiation, Ajaero said that the current inflation trend on goods and services would eventually determine what is agreeable. The implication is that should prices of goods and services continue to gallop, even the N615,000 wage may be off the table for a N1 million minimum wage request!

Preposterous as the above sounds, the request is logically in tune with the economic realities in the country, courtesy of the government’s policies and bad governance. It will be recalled that on May 29, 2023, President Bola Tinubu, minutes after taking the oath of office, removed the age-long fuel subsidy, paving the way for an over 200 per cent increase in the prices of the white commodity and escalating prices of goods and services across the board.

Already, the United Nations has fixed the $2 per person daily to beat the poverty line. By organised labour’s benchmark of a family of six, that is $360 (or N540,000 at N1400/1$) a month. And estimating the basic needs of housing, electricity, water, kerosene or gas, food, medicals, clothing, sanitation and transportation, based on the current unit costs, labour has arrived at N615,000 minimum for each worker.

Apparently in reaction to the proposal, the governors, under the aegis of the Nigerian Governors’ Forum (NGF), have said that each state would work out its pay grades. Chairman of the NGF, AbdulRahman AbdulRazak, said: “As members of the (national minimum wage negotiation) committee, we are reviewing our individual fiscal space as state governments and the consequential impact of various recommendations, to arrive at an improved minimum wage we can pay sustainably.” AbdulRazak pledged that a high minimum wage would emerge from the negotiation, but there is no guarantee that the current proposal from labour will get their approval – which is a tinderbox of industrial crisis in waiting.

Tellingly, Nigeria has enough resources to wager labour’s demand for N615,000 minimum wage or more, barring systemic inefficiency and the self-centredness of the political class. The country has enormous natural resources to prosper each local government and lift all residents out of the poverty steep slope. The tragedy has always been the gross incompetence of those entrusted to pilot our affairs, coupled with corruption in all facets of our national life. Instead of the state governors giving excuses of lean revenue to fix what they can ‘sustainably’ pay, the current socio-economic realities should spur them to collectively do more to exceed the new living wage benchmark that all parties will agree.

Glaring in the minimum wage narrative is the state’s failure to meet its primary responsibility to the citizenry. More than half of the items on Labour’s shopping list that add up to the N615,000 benchmark are basics that are statutorily taken care of in other parts of the world and rarely a headache for working citizens who pay taxes. The point is that had the government has been alive to its responsibility of real governance that fixes housing deficits, epileptic power supply, lack of potable water, food insecurity, public transportation problems, challenges in medical and education services and so on, and does less of inept handling of public policies, charlatan performance under the veneer of palliatives, and sincerely tackles corruption and mismanagement of our commonwealth, labour will have little justification for a humongous threshold and at greater risk for already wayward inflation.

The political class must, therefore, quit the head-in-the-sand reluctance on real issues of governance and general welfare. Already, the government and its institutions are not trustworthy, and the trust deficit is at an all-time high. Where are all the electioneering and post-petrol subsidy promises of the current administration, one year in the saddle? How come a country that can afford N160 million worth of brand-new SUVs for senators and has not for once reduced politicians’ humongous monthly earnings to mirror national insolvency, now cannot muster resources to pay living wage to workers? If political freeloaders in so-called poor states could earn equal pay with their colleagues in viable states, why should the workers in the poor states not earn the same salary as their counterparts in the rich states?

Thankfully, the Federal Government’s tripartite 37-member committee is fashioning out a new minimum wage agreeable to all. All hands, including those of the state governors and private sector, must be on deck to reasonably edge a fair cut for workers and avoid industrial action. The political class must be ready to see this through, even if it warrants toning down their profligate lifestyle, and for once, make sacrifices for the people.