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Minimum wage, maximum trouble

By Rotimi Fasan
IT was supposed to be a fight tothe finish between organised labour, led by the Nigeria Labour Congress and the Trade Union Congress on the one hand, and government both at the state and federal levels, on the other hand.

Nigerians had gone to bed last Tuesday night believing that the planned three days warning strike to protest against failure to implement the Minimum Wage Act by the government would go ahead no matter the position government decided upon- whether to pay or not to pay the proposed minimum wage of N18, 000 across board .

This was what NLC said. Indeed the labour leaders had threatened Armageddon, warning Nigerians to stock their homes with food items that would last them the duration of the strike. The country would be totally grounded they warned and nothing would make them look back. All this was in a bid to make Nigerians swallow the bitter pill of temporary inconvenience in order to win the long time goal of earning a living wage.

There was no doubt labour’s planned shut down of the country was conceived with good intentions, especially for the longsuffering workers of this country. But from the way some labour leaders sounded, one would have thought they would be immune from whatever hardship their action would bring about. But we woke up in the morning only to hear that they had retreated. One wonders why things had to drag to such unseemly issuance of threats before somebody thought all concerned should come to agreement.

Which was the question asked by an incredulous labour leader who had appeared on the African Independent Television that morning. He said any talk of suspended strike was a hoax. His members, he assured his interviewers on the morning programme, would go ahead with the strike as they had not received any contrary directive from their leaders. But as events would confirm shortly after, the strike had indeed been called off. It was an anti-climax, probably disappointing for Nigerians who must have hoped to stay back home to enjoy yet another of unexpected holidays.

Days after the supposed agreement between labour and government, there are conflicting statements from various quarters as to what was actually agreed upon. A clear indication of this was the insistence by some states that they would not be able to pay the minimum wage without fundamental review of the allocations to Abuja and the states. In a word, governors under the aegis of the Governors’ Forum are calling for reduction in the percentage allocation from the federation account to the Federal Government.

While Abuja had agreed to implement the new minimum wage from levels 1-6, only Lagos, of the 36 states, has taken any concrete step to implement the Minimum Wage Act. Abuja (and Lagos before it) has a way of taking decisions that would have ripple effects beyond its boundary without taking care to know how such decisions would impact down on the lower tiers of government. Since it could pay the minimum wage, it matters little to it how the states generate funds to meet the additional burden on them.

In classical reversal of the demands of federalism, it is the constituent states from which funds are remitted to Abuja that still go with bowls, like beggars’, to have a share of what they produced.

The point being made here is that the root of the minimum wage trouble is in the operation of the malformed system misnamed federalism that has been imposed on Nigeria. But the country’s politicians, many of whom are beneficiaries of the unwholesome arrangement, are careful not to address the issue headlong.

They would rather engage in the subterfuge of appealing to labour and impoverished Nigerians to bear their poverty a little longer. But nobody would listen to them because everyone knows just how often this mostly idle lot take care to pay themselves huge salaries and allowances we’ve been told by Sanusi Lamido, the Central Bank Governor, only serve to increase the country’s recurrent spending.

Even though everyone knows what goes to Barack Obama monthly as salary because it is a statutory matter, nobody knows what an average Nigerian senator or reps member earns. All people know is that what goes to each of them under alike authentic and dubious headings, allowances for unexplainable duties, runs into hundreds of millions of Naira per year. Yet many of these individuals would be seen dozing in their chairs where they care to show up at all during parliamentary sessions.

While the executive has tried to no avail to cut down on the allowances and salaries our so-called law makers routinely pay themselves, such effort ring hollow because members of the executive arm continue to enjoy equally outrageous allowances and salaries paid to themselves and their aides. This is why labour sees no sense in being told to cut down on its demands on behalf of Nigerian workers. Like everybody else, the umbrella body of a total workforce that is less than five per cent of the country’s productive sector but earns more than 80 per cent of monthly allocation to states- the NLC wants a share of the ‘national cake’ for workers.

Those in the informal sectors of the economy, especially the illiterate traders and food sellers in the market, are watching and you can be sure that they would waste no time in asking for their share of the largesse once it is implemented by raising prices of their wares. In the end, nobody wins as inflation creams off whatever gains the various increases in salaries are meant to provide.

It’s time we realised that solution to workers problem is not constant increases in wages that serve but only to increase our troubles. What’s the percentage increase in wages relative to the disproportionately high increase in prices of commodities and services? Why do we need sacks to carry money to pay for a few tubers of yam? The whole hullabaloo about limits placed on amount that can be withdrawn at a time from ATMs has to do with the fact that inflation has made nonsense of our Naira that daily depreciates beside foreign currencies.

The solution to our wage problem is not asking for more money to pay for the same service/commodity or less. Rather we need to strengthen our Naira by reverting to a regime of strong Naira that carries meaningful value. This would not be possible until we reduce the amount of money we keep in circulation. But more fundamentally, it would require a total reappraisal of the skewed federalism that is presently run without regard to fiscal discipline and responsibility.



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