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Why minimum wage was pegged at N18,000

By Funmi Komolafe
Fresh facts emerged, weekend, that organised labour, government and private employers may have agreed on N18,000 per month national minimum wage to save jobs.

Sources at the meeting where the decision was taken said the paramount consideration was an affordable pay rise which would be affordable by all employers and to avoid retrenchment by state governments.

The source said, “what is important is not the amount by which the minimum wage has been raised but the permanent structure we have put in place for subsequent adjustments.”

This is an increase of N13,000 over the minimum wage of year 2000 which was a basic salary of N5,500 per month.

The N18,000 per month national minimum wage just negotiated  is not limited to basic salary. It includes transport and housing allowances,etc.

Representatives of the  government, employers and  organised labour after a series of meetings,  agreed on a minimum wage of N18,000 per month for the least paid worker.

Vanguard also learnt that the committee made a shift from the ad hoc method of negotiating wages in the public sector to initiating a more enduring method of wage administration, especially in the public sector.

Details of the package were not available at press time.  The negotiating committee members comprised eight representatives for Labour, Government and Employers.  Minister of State for Finance, Mr. Remi Babalola and representatives from Lagos and Enugu states were also members.

Authoritative sources at the negotiation meeting, chaired by a former Chief Justice of the Federation, Justice Alfa Belgore, told Vanguard that the committee’s decision would be presented to Acting President Goodluck Jonathan who will in turn forward it to the National Assembly.

The assembly is expected to amend the National Minimum Wage Act 2000 to reflect the new minimum wage of N18,000.

It was gathered that N18,000 was  the  consensus  of all the parties present.

Our source said this was accepted to avoid employers embarking on massive down-sizing due to inability to pay.

Once passed into law, the new minimum wage would be binding on all employers of labour; federal and state governments and private employers.

The Nigeria Labour Congress had in December 2008 demanded a new national minimum wage of N52,200.

Labour’s agitation for a pay rise followed an upward review of salaries of political officer holders by about 300% and galloping inflation.   Labour had complained that whereas market forces dictated prices, wages have remained stagnant.

With the negotiation, Nigeria has complied with Convention 98 of the International Labur Organisation on Collective Bargaining and Tripartism.

Although negotiation on the review of the national minimum wage commenced before he became minister of labour and productivity, Labour and Productivity minister, Chief Emeka Wogu has repeatedly   said that Acting. President, Goodluck Jonathan was committed to a pay rise for workers.

The national minimum wage negotiated in 2000 during the administration of President Olusegun Obasanjo recommended 25% increase after the first two years and 15% increase after another two years.

However, President Obasanjo reneged on the agreement on the basis that the nation could not afford the review.


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