Minimum wage: economist urges states, LGAs to comply

An Economist, Dr Aminu Usman, has urged the States and Local Government Authorities (LGAs) to ensure payment of the new minimum wage to their workers.

Usman, the Head of Economics Department, Kaduna State University made the call in an interview with the News Agency of Nigeria (NAN) on Friday in Abuja.

The don gave assurance that the Federal Government would pay its workers but doubted if the states and LGAs would easily comply.

“Implementation by states and LGAs will be resisted by some unless labour twists their hand through further and more encompassing industrial action.

“What are the economic and welfare implications of the implementation of minimum wage? I think the law will cause an increase in staff cost for all governmental levels that implement.

“However, the increase may not be much considering that the benefits get lower and lower as it progresses to higher grade levels.

“The market might react with increase in prices leading to some price inflation. This might be accentuated by the time of the implementation.

“If it is implemented now when the rains are just starting, food price inflation is about to set in, then the expected pay rises will be wasted by inflation that is certain to happen,’’ he said.

Usman, however, said possible delay in the implementation of the minimum wage would make the increase meaningful.

“But if they succeed in delaying implementation to the fourth quarter of the year when harvest is expected, the magnitude of the price and food inflation will be much lower.

“The increase of the wage becomes meaningful to the average worker,’’ he said.

According to him, the minimum wage is a good thing that happened to the lower rank of workers at intergovernmental level.

Usman said it might not be so for workers in the private sector, especially the so-called Small and Medium Enterprises (SMEs) and other informal private sector organisations.

“For the public sector, the minimum wage is like a benchmark for salary increase across the board for all ranks in the civil service and other Ministries, Departments, Agencies (MDAs),’’ he said.

A new National Minimum Wage Bill of N30,000 was passed by the National Assembly on January 29 and March 19 and was signed into law by President Muhammadu Buhari on April 18.