Mazi Sam Ohuabunwa

It must be minimum pay for minimum work 

by MAZI SAM OHUABUNWA, OFR

November 7, 2018 | 1:35 am
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The national labour movement represented by NLC and TUC is threatening to shut down the Nigerian economy soon if their demand for a minimum wage of N30,000 is not accepted by the governments of Nigeria in the next few days. The Nigerian economy is still struggling despite the efforts of government and it will be disastrous to allow the labour to proceed on the planned indefinite strike. I must say that it is within the ambit of the labour movement to demand a review of the national minimum wage. I also must state that I absolutely agree with labour that there is absolute need to review the minimum wage.

 

As at 2011 when the present minimum wage of eighteen thousand naira came to effect, the exchange rate of the naira against the US dollar was 156 naira. Today it is about 363 naira to the US dollar, and this represents 132 % depreciation. Since the last raise, inflation had climbed from 10.8 % to nearly 18% though it is now about 11.8%. Therefore from every objective analysis, the demand is justified. As we have always stated, agreements on national wage reviews is a tripartite affair between labour, employers and government. It is must be negotiated, not imposed by any party. Ideally it is essentially between workers and their employers. Government is essentially a regulatory agent. However in Nigeria, government is also a significant employer and this dual role seems to complicate the issues. In this particular negotiation, the government’s conduct has been inelegant. Several months ago, the federal government assured Nigerians that a new minimum wage would be operative by quarter 3 of this year. We are now in the middle of Q4 and no agreement has been reached. So every often, the government has failed to convene the meeting of the negotiating team and the last time, the labour had to go on a warning strike before the government reconvened the meeting. I am always surprised at the way government treats negotiations regarding workers welfare. Whether it is NLC, ASUU or NASU, government seems to adopt the same strategy. Dillydally, evade the issues, make promises, break the promises, flex muscles, try to divide the unions and eventually precipitate a strike. Then the economy goes through rough patches, with everybody suffering. After damaging the economy for a while and causing pain for all- employees, employers and the citizen, they get back to the negotiating table, almost always accepting the demands of the labour and often paying arrears. I have always wandered why this strategy will not change.

 

May be because the governments have no real understanding of what harm is done to the economy when work is disrupted. They seem to have no idea of what losses businesses incur any hour work is stopped. Yet governments in Nigeria allow strikes to go on for many days and in some cases many months before they accept workers’ demands. Then they pay workers for the months they were on strike. This apparent lack of understanding of how work disruptions affect our economic growth is demonstrated each time, governments of Nigeria declare public holidays for no good reason. I am still at a loss to understand why events that fall on holidays should attract declaring normal working days as holidays. In Nigeria Saturday and Sunday are work free days thankfully. Therefore what is the purpose of declaring Monday and Tuesday as public holidays for events that happened on Saturday and Sunday? Yes, developed economies may have the luxury of doing that (but many do not), but for a poor country like Nigeria to seek every opportunity to keep people out of work is preposterous in my view.  Therefore it is imperative that the government gets serious, and avoids this hide & seek stance and delaying tactics. The issue of reviewing the minimum wage has merit and should be quickly concluded to avoid unnecessary disruption of the economy.

 

But I must also advise labour to show understanding on this matter. First, they must realize that the ability to pay is a critical factor in negotiating wages. And it is clear to the blind and deaf that many states in Nigeria are patently unable to pay even at the current minimum wage level. So does it make much sense to force state governments to accept the N30,000 minimum wage when many are in arrears of several months at the current rate, despite the several bailout efforts by the Federal government?. What will be the point of forcing states to accept rates they cannot pay? Yes, if they managed their finances better, they could pay more. But are the state resources only for paying workers emoluments? Nigeria currently spends up to 70% of the National Budget on recurrent expenditure and for some States it goes up to 90%.  We therefore need the governments to be more efficient in resource disposition. But should we spend such savings on worker emoluments instead of on capital expenditure? My point is that Labour should be reasonable in their demands. Alternatively we may have two minimum wages: federal and states. I believe the federal can pay the N30,000 but states may pay N22,000 or N25,000. That to me is pragmatic and should receive proper consideration by labour. To insist on national minimum of N30,000 may be stretching the argument too far.

 

Finally, let me also add that we should not be trying to reward indolence and low productivity. It is well known that many in the civil or public service are over-paid. Many do not produce enough to merit their current pay, including the high and mighty in all the tiers and arms of government. So if we are making a case for increased minimum wage we must also make a case for increased minimum work. Otherwise, we may just be robbing Peter (ordinary Nigerian taxpayers) to pay Paul (fat-cat public servants in the executive, legislature & Judiciary). That will not help to improve our economy, it may actually drag us further down as we may end up paying 100% of our National income to less than 2 million public servants. That will be patently unfair to the people of Nigeria.

 

 

MAZI SAM OHUABUNWA, OFR

sam@starteamconsult.com

 

 

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by MAZI SAM OHUABUNWA, OFR

November 7, 2018 | 1:35 am
  |     |     |   Start Conversation

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