By VICTOR AHIUMA-YOUNG

Chief Olusegun Obasanjo,President Goodluck Jonathan and Abdulwahed Omar, NLC president

THE workers’ long journey to the N18,000 minimum wage, which the Senate passed into law on Tuesday, February 22, started long before the late President Musa Yar’Adua, on July 14, 2009, through the then Secretary to the Government of the Federation, Alhaji Mahmud Yayale Ahmed, inaugurated a tripartite Presidential Committee on National Minimum Wage, headed by Chief Justice Alfa Modibbo Belgore.

The Belgore Committee, set up after Labour and its Civil Society allies began nationwide rallies and march protests on new minimum wage, planned full deregulation of the downstream sector of the petroleum industry and implementation of Justice Uwais National Electoral Reform Commission, NERC.

Leaders of Nigeria Labour Congress, NLC, in December 2008, after a report of an internal committee it set up look to work out appropriate minimum wage, publicly demanded for N52,.200 minimum wage for workers.

Against the background for the demand, in February 2009, leaders of Congress recalled that the demand for upward review of workers’ wage in modern day started in 1945, noting that between 1945 when workers staged the famous 45 days general strike for a Cost of Living Allowance (COLA) and 2007, when the demand won by workers for a 25% general wage through the Ernest Shonekan Wage Consolidation Committee was arbitrarily cut down to 15% by Obasanjo, workers had struggled at 15 times to have wages improved and a national minimum wage legislated upon.

According to the NLC, agreements reached with government were sometimes distorted at implementation or not implemented at all by government. “For example, the 2000 Wage Review Agreement provided for a further 25per cent wage increase for workers with effect from May 1, 2001, and 15 per cent wage increase with effect from May 1, 2002. This was not implemented. Following industrial dispute over this, a 121/2 percent increase, rather than the 35 per cent agreement in 2000, was signed in 2003. But, in the end, only an increase of between four and 12 1/2 per cent was implemented by the Federal Government. Although the Shonekan Committee was set up against this background and recommended a 25% increase in salaries, Obasanjo unilaterally implemented a 15% increase in 2007. Government also failed to abide by the time frames set out for subsequent negotiations with workers. Workers always had to fight to get government to agree to collective bargaining even when the procedure was agreed in previous negotiations.”

NLC lamented that today, workers found that they had to fight yet again to get government to agree to

negotiate a new national minimum wage and a general upward review of wages.

Reasons for new wage

Leaders of NLC argued that there were several reasons why there must be an upward review of workers wages.

It said, “In the last one year, inflation has intensified with the cost of living index in the urban sector increasing by over 14 per cent. The disproportionate increase (20.9 percent) in the cost of food means that the erosion in the real wages and salaries of workers is alarmingly severe. The process of monetizing and consolidating in-kind benefits which were hitherto not taxed has resulted in an escalation of the tax paid by workers. “This has further depressed the real take home pay of workers. All over the world, salary increase in the public sector is underlined by the principle of equity and the need to bridge social inequality in the face of widening economic and social gaps amongst citizens of a country.

“In Nigeria, while workers’ salaries increased by 15 percent between 2006 and 2007, those of political office holders increased by over 800 percent.

The Congress contended that in Sub-Saharan Africa (SSA), Nigeria ought to be paying one of the highest minimum wages, given its resources and level of development. The reality, however, according to it, is that the existing minimum wage in Nigeria is one of the lowest in Africa.

To the NLC, the minimum wage of N7,500 was far below the minimum cost of providing basic needs for the worker and his/her immediate family.

It explained that, “Our survey shows that today the minimum cost of providing for basic needs is N58,200. This estimate is based on threshold hardship levels in which 6 or 8 people may be forced to live in one or two rooms and endure a dietary and living style that is most rudimentary. Additionally, it should be noted that N18,000 is allegedly spent on the feeding of one prison inmate monthly, while the estimate here is merely N20,000 for the feeding of a family of 6 per month. An examination of the cost of living since the enactment of the National Minimum Wage Act 2000 shows clearly that the cost of living index has risen so much that the real value of the minimum wage set by the law has virtually been wiped out. Employing published data on the Consumer Price.

Index (CPI) from 2000 till July 2008, and taking into account developments in the overall economy and compensation adjustments since 2000, the minimum wage of workers in 2008 can be computed. This computation shows that in real terms, the minimum wage of workers would have to be

adjusted upwards by a minimum factor of 4 in order to maintain the relative position of the least paid worker in the national compensation structure established in 2000. Thus, the appropriate amount required in 2008 to maintain the real value of the National Minimum Wage set in 2000 would be

(N11,213.52 x 4=N44,856).”

Estimated Monthly Cost of Meeting Basic Needs for a Representative Family

Item Cost

(N)

Accommodation 6,000

Utilities

a. Electricity 1,000

b. Water 500

c. Kerosene 4,000

d. Communication 2,000

Food 20,000

Clothing 4,000

Medical 5,000

Education 6,000

Cleaners, Soap and Detergents 1,300

Entertainment, Recreation and 1,000

Communication

Miscellaneous 1,500

Total N58,500

Based on the above, NLC, wrote to the government demanding a N52,200, minimum wage for Nigerian workers, saying “This is the approximate average of the minimum wages when we take into consideration Minimum Annual Wage Levels in African Countries, the minimum cost of providing basic needs for the worker and his / her immediate family and the cost of living data. (ii) that the Federal Government sets up a tripartite committee as a matter of urgency to negotiate and agree on this, so that the National Minimum Wage Act 2000 can be amended to reflect the new amount. It is instructive to note that current negotiations on fixing a minimum wage for Ghana has recently reached preliminary agreement within the tripartite framework to adopt the basic needs approach in computing the minimum wage. (iii) an amendment to the Act to the effect that the National Minimum Wage law should apply to any establishment employing 20 or more workers, instead of the 50 workers currently stipulated by law. (iv) a general wage review; there is an urgent need to commence negotiations in both the public and private sectors so as to agree on new compensation packages. (v) a wage review in the public sector based on the minimum wage computed above.”

“Currently, the least salary in the Civil Service under the Consolidated Civil Service Salary Structure is N133,564 per annum or N11,130 per month. The new salary structure recommended by the Congress is based on the least salary of N52,200 per month or N626,400 per annum, which is the proposed new national minimum wage. The new Consolidated Salary Structure would then be constructed so as to maintain the existing reactivities in the salary structure.”

Belgore Committee

The Belgore Committee, which had as members government, employers (represented by Nigeria Employers Consultative Association, NECA) and labour (represented by NLC and Trade Union Congress of Nigeria, TUC) sat for close to two and a half years and recommended N18,000 as the minimum wage.

The 24 member committee, which completed its activities April submitted on May 22 with a draft bill on the new national minimum wage to make its passage into law seamless.

After waiting for Jonathan to act on the report towards its implementation, leaders of NLC on October 27, 2010, issued a 14, day ultimatum urging government to begin the implementation of the recommended figure or face the wrath of workers.

On that same day, government took its first step to stop the looming action when it set up a committee to address the “technical issues” in the report.

The committee, headed by Vice President Namadi Sambo, was given three weeks to submit a report. But this did not sway organised labour’s resolved to go on with the strike.

However, the strike only took place on the first day. That is, Wednesday, November 10, 2010, despite last-minute negotiations between Jonathan and union leaders.

The action was called off after the president assured that a meeting of the National Council of State, NCS, would be held on November 25, 2010, for that purpose as he said the NCS has the sole power to approve the new minimum wage

The NCS met on that day and ratified the new minimum wage of N18,000 and asked Jonathan to forward a bill to that effect to the National Assembly for it to be legalised.

A draft bill was forwarded to the National Assembly in the second week of January, 2011 following threats by organised labour to resume the suspended industrial action over the issues.

Not yet Uhuru

However, the passage of the bill by the Senate is seen as the just the beginning of the struggle because, besides the fact that the House of Representatives has passed it, the senate has to concur, before both Houses harmonise their differences, if any, and then presidential assent.

The main battle ahead is its implementation by the state governments. In fact, a couple of state governors said they would not be able to implement it. Unconfirmed reports claimed while about 26 governors have expressed willingness to implement it once it becomes legal, the remaining 10 are foot dragging.