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Way out of the minimum wage quagmire

Punch Editorial Board

The storms are gathering for a labour strike over a new minimum wage demand, as government is yet to make a concrete offer. Shortly after the May Day rally in Abuja that ended in a fiasco, the National Union of Textile, Garments and Tailoring Workers of Nigeria served notice of an imminent national showdown, if a tripartite committee was not set up to urgently actualise a salary hike for workers. The Nigeria Labour Congress is pressing for a N56,000 minimum wage from the present N18,000.

But the federal and state governments have been foot-dragging on the issue. The NUTGWN threat should not be taken as an empty one, as it is an influential affiliate of the NLC. Its General Secretary, Issa Aremu, had warned, “Hungry workers are legitimately angry workers,” against the background of increasing inflationary pressure in the country, which has made nonsense of the value of the naira.

READ: FG okays 29-member panel on N56,000 minimum wage demand

However, the Federal Government responded to labour’s tough talks when the Federal Executive Council adopted the report of the 29-man joint committee on the matter and also set up a tripartite committee to negotiate the review.

NLC President, Wabba Ayuba, had earlier said that labour was miffed by the undue rigmarole. True, nobody can survive today with N18,000 monthly wage in the country. The National Bureau of Statistics figures suggest so: “Nigeria consumer prices increased 17.24 per cent year-on-year in April.” Cost rose faster for food: garri, bread, meat, fish, yam, egg, oil, cereal, among other items.

While workers are grumbling for being owed between six and 10 months in salary arrears in some states, retirees die daily without being paid their gratuities and pensions. From 27 states that were plagued by this plight in 2015, it has spiralled to 30 states at present. The situation is so ridiculous that salaries are being paid in fractions in some states, while pensioners on as low as N2,500 monthly stipend are compelled to receive just N1,500.

Nevertheless, amid this scenario is the big question: how will the centre and the states shoulder the burden of a new minimum wage? This is a question the organised labour shy away from. Yet, the reality cannot be avoided. If the aftermath of the N18,000 Minimum Wage Act 2011 is anything to go by, then not much will be achieved from the current agitation. The hue and cry about salary review subverts its inherent gain, as unscrupulous drivers of market forces take the centre stage.

The last review was done when crude oil sales at the global market averaged $100 per barrel. The governors, who were newly elected, driven by the exigency of political correctness, accepted to pay. But sooner than later, salary arrears began to pile up; threats to lay off some workers cascaded, just as a state like Benue asked workers receiving N18,000, to accept a N6,000 slash in a proposed general pay reduction in order to clear the backlog. These formed the basis of the Nigeria Governors’ Forum declaration in November 2015 that it was irrational for anyone to expect the states to still stick with the extant wage structure, when crude oil price had dropped from $100 to $27 per barrel.

READ ALSO: Labour to protest planned removal of minimum wage from exclusive list

 No doubt, wage reviews have a five-year cycle, which means that Nigeria is one year behind. How to go about it without creating monstrous industrial and economic conditions is the puzzle both the government and the organised labour have to confront. A compromise deal of focusing on an agreeable percentage increase for only workers on the lower salary grade levels would have been the ideal; but minimum wage demand in Nigeria is a euphemism for a general salary hike.

Although public officials are living in obscene luxury, we dare say that the economy presently does not have the shocks to absorb the corollaries of a wage hike. The country has yet to fully extricate itself from the smog of economic recession. Instructively, the World Bank indirectly affirmed this recently, when it warned that the recovery throughout 2017 would still be fragile, as it is driven mainly by improved oil revenue. Therefore, the economy needs to be disentangled from its present boom-and-bust cycle for a sustainable general wage hike to prevail. This means that oil has to take a back seat in the way we plan and grow the economy. For now, it is unrealistic to have a wage increase.  It will be counter-productive, lead to further job losses in the private and public sectors and push up the inflation rate.

The organised labour has to accept the bitter truth that it is largely to blame for workers’ present misery with its complacency over the issue of corruption of elephantine dimension in governance. A labour movement, conscious of the fact that workers are the victims of empty treasury, would have risen against the looting binge of the last administration. A revelation in a US court last week indicates that $15bn might have been looted through arms deals; the raiding of the Excess Crude Account and Foreign Reserves, lack of savings from the last oil boom are other sore reminders of its negligence.

Worse, payrolls across the states and at the federal level are filled with “ghost” workers and pensioners and those employed in multiple ministries and agencies.  Oyo State, for instance, discovered 16,000 “ghosts” last year. Across the country, these gulp hundreds of billions of naira annually. It is labour inertia that accounts for why some governors have allegedly embezzled substantial amount of the two bailouts and the reimbursement of the Paris Club refund meant for them to liquidate workers’ salary arrears.

No economy survives this blitz of abuses. The labour unions should henceforth be the vanguard of a well-managed economy, concerned about how to end the imbalance between the 80 per cent public spending on recurrent and 20 per cent on capital expenditures. Instead of a wage increase, labour should collaborate with the government for the constructive privatisation of the refineries, steel, railways and other national economic assets.  This will boost foreign direct investment and allow government to deploy its resources to the provision of social infrastructure. Only this re-direction can guarantee workers’ welfare.

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