June 15, 2011

Minimum wage issue, a time bomb – ACN

The Action Congress of Nigeria, ACN,  has described the minimum wage issue as a time bomb that is capable of blowing into smithereens the existing industrial peace and harmony across the country and hurting the economy, if not well managed.

In a statement issued in Lagos,Wednesday, by its National Publicity Secretary, Alhaji Lai Mohammed, the party called for an urgent rejigging of the revenue allocation formula to put more money in the coffers of the states and make it possible for them not only to pay the minimum wage, but also to improve the working conditions of their workers.

It said while the long-suffering Nigerian workers deserve even more than the approved 18,000 naira as minimum wage, the current unfunded mandate handed over to state governors by the federal government – in the name of a new minimum wage – is the wrong way to go.

ACN explained that the new minimum wage, which curiously may even benefit workers at the higher echelons more than the lower-level ones, may distort the wage bill of some states to such a level that they will need to borrow monthly to even be able to pay, leaving nothing for development projects.

”Today, the federal governments takes 52 per cent of the accruing revenue, to a mere 30 per cent for states that are saddled with more responsibilities like paying teachers and funding health care services.

This badly skewed allocation formula effectively renders the states impotent in paying the stipulated minimum wage, thereby putting them on a collision course with their workers.

”The jumbo allocation to the federal government negates the principle of federalism, which should see the federating units – the states – which are the owners of the revenue keeping a chunk of it and deciding what to give the federal government.

”This is why we are calling on our federal lawmakers, who are the true representatives of the people from their states, to act urgently to change the revenue allocation formula to give the states at least 45 per cent each.

This is the biggest assignment facing the Seventh National Assembly and we have no doubt that they will not fail,” the party said.

ACN expressed concern at the implication of the emerging situation in which many states have publicly stated that
they cannot afford  to pay the new minimum wage.

”States are saying they cannot pay. Workers are agitating for immediate payment, especially as there is a law backing such payment. A stalemate is created. Industrial peace and harmony becomes the first casualty once workers down tools. The economy suffers in the long run, and no one benefits at the end. This is why we have termed it a time bomb, which must be defused immediately,” it said.

The party notes that the gravity of the situation is such that even some oil producing states, some of which get double what their non-oil producing counterparts receive, are saying they cannot pay the minimum wage, adding
that even the federal government that foisted the minimum wage on the states has not paid it.

ACN said in order that its stand on this issue is not distorted, its stand remains that Nigerian workers who are the creators of the nation’s wealth deserve the new minimum wage and even more, but that the states should be
immediately empowered to pay, instead of being given an unfunded mandate.