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Need for caution on new minimum wage

THE announcement that the Federal Government has set up a panel to look into the request for  upward adjustment of the minimum wage from the existing N18,000 per month to the requested N56,000 per month is not surprising.

Nigeria remains a country in which governments and the people do the same thing over again and expect a different result. The results of the current agitation can be predicted in advance. An inflation spiral will follow which will inevitably leave workers worse off than before.

Former President Obasanjo agreed to increase the minimum wage as he was getting ready to campaign for re-election in 2003. Later, ex-President Jonathan moved the minimum wage by 140 per cent from N7500 to N18000 per month as he was campaigning for the 2011 elections. If enough pressure had been piled on him in 2015, he would most likely have bowed to another upward review.

Each wage increase had elicited momentary euphoria among the workers, but in the long run, it turns out to be a deceptive trap. Others stakeholders in the economy then take their turns to relieve the wage worker of his gains. House owners, market traders, manufacturers, transporters, carpenters, schools and others increase their charges.

These price increases eventually render the new minimum wage meaningless for the working classes. And very soon, the Nigeria Labour Congress, NLC, the Trade Union Congress, TUC, the United Labour Congress ULC and their vocal  members and affiliates are back in the trenches asking for yet another wage increase.

Given the slow pace of the current regime so far, it is predictable that a new minimum wage Bill is likely to be passed sometime in 2018.   Mousetraps work because rats will always think they will get free food. Then, the horrors will follow.

It is obvious to all of us that the economy which is still technically in a recession will find it difficult to carry a wage increase, not to speak of a 300 per cent increase. Right now, most states are owing workers months in arrears in salaries and pensions. In fact, Benue State reportedly owes 70 months (nearly six years) pension to its retired workers! The tale of woe extends to the private sector. An increase at this juncture could lead to massive job losses and keep more idle hands in the job market. We call for extreme caution in approaching this sensitive issue.

There is also a need for political office-holders to cut down on their excessive spending on personal comfort. It is wrong for political leaders to live in great luxury even under a grinding recession while ordinary workers live in abject poverty. A massive cut in government overheads cannot be ignored if workers are ever to enjoy improved pay.

 


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