My World

September 28, 2018

My thoughts on minimum wage

File photo : NLC’s protest on minimum wage.

By Muyiwa Adetiba

Those who should know tell us that people fall into poverty every hour in our country! That’s a lot of people in a year! But it’s hardly surprising given that our minimum wage as it stands, barely sustains borderline poverty. It is therefore clear that our minimum take-home pay can no longer take anybody home, as the popular saying goes.

 The Federal Government and the unions have been involved in wage negotiations for quite a while now. Given the length of time the whole thing has taken, it’s easy to accuse the two concerned parties of playing politics with the lives of poorly paid workers, especially in a country where everything is defined in terms of politics and expediency.

Members of Oyo state NLC on Wednesday stage another round of protest round the city of Ibadan the Oyo state Capital over the State Governments anti Workers policy.
Pic: shows Members of Oyo state NLC on Wednesday during another round of protest round the city of Ibadan the Oyo state Capital over the State Governments anti Workers policy on Wedneeaday.PHOTO: by Dare Fasube

To me, the minimum wage issue is a catch 22; another in the many contradictions in our mode of governance. We know the rapid descent into poverty has to be stemmed. We know it is caused in the main, by fiscal indiscipline. This has led to a large disparity in income distribution, unemployment, low wages and general economic stagnation. We also know that one way of stemming poverty is to restructure the economy and reflate it through disposable income.

And disposable incomes come from stronger earning power. We also know that decent wages increase productivity while improving the health-financial and physical-of the earners. But we lack the will for fiscal discipline so we pay lip service to the concept of an improved minimum wage. The result is that we find it difficult to reconcile paying what can be considered a decent wage when there is a problem in paying the current paltry one on a regular basis.

Or justify increasing recurrent expenditure when there is barely enough to fund infrastructures. Or to negotiate for the states and still claim to be running a Federal system. As it is, many states which are struggling to pay the current minimum wage will find any wage increase herculean if not impossible.

One of the things I quickly learnt when I became an employer of labour was the challenge in channelling the creative energy and loyalty of people with diverse backgrounds into a productive force that would foster the birth and growth of an enterprise. And fundamental to that challenge was the regular payment of wages.

 No matter how nice, indulgent or accommodating you are as a boss, if you can’t ensure regular wages, you will soon become a bad boss. Excitements for an idea or the future prospects of an enterprise do not replace the need for now. Now meaning monthly payday. I also learnt to my chagrin, that the best hands were usually the first to go. Many of those who stayed didn’t do so willingly.

They were invariably less marketable. The natural consequence of this was a decline in productivity and an increase in theft. It took me a while but I learnt that the solution was to be decisive and learn to cut out fat. And wherever possible, to the bone. Whatever ways you might have to otherwise motivate your staff, you must first learn to pay wages. And to do that, especially for a young, struggling organisation, you have to be lean and nimble.

This is my recipe for those negotiating the new minimum wage. We need to be able to attract the best brains to the public service because it is the country’s brain box. It is where the country’s future and by extension, the future of all of us is being shaped.

So we have to pay our public servants well. And to do that meaningfully, we have to learn to respect merit and competence. We also have to be lean so we can be nimble. The last one unfortunately, is an anathema to the two negotiating parties. Trade unions do not like to hear the word downsizing. Even if a concern has become moribund, staff must be kept and salaries paid. They also do not like smarter, better ways of doing things. Especially if it means automation.

On the other hand, the Executive, the proverbial Big Man, does not want his comforts compromised. He is used to having a retinue of Executive Assistants; people who make his tea, people who run his errands and people who make his expansive office full and important. Even if they do next to nothing. Alongside restructuring the economy therefore, we need to also restructure our mind set.

As for the states, it is stupid to have a ‘one-size-fits-all’ wage structure when there is a vast disparity in their revenue bases. It is simply preposterous to expect Zamfara to pay the same wages as Lagos. Or Ekiti to pay the same wages as Akwa Ibom. Apart from an ability to pay, cost of living also differs from state to state. Unfortunately, the governors of these smaller states have not learnt to be lean and nimble; to cut their clothes according to their sizes.

It is like an Editor who once told me that his counterpart in a very popular newspaper at the time was his classmate at the university and he saw no reason why his salary should be far lower than his former classmates’ salary. My answer was to ask him to count the number of adverts that paper made in a day and compare it with what we were making in a month! But every governor wants to live big irrespective of what his IGR says.

It is my belief that every state including Lagos State can cut down on cost significantly. It should start with the governors themselves. Many of them don’t see any difference between a state purse and a personal purse.

 And the rest of us who should call them to order, are busy being grateful for a ‘generous Governor’ as if he is using his money. But what irks most is the obvious waste. The kind that no self-respecting leader in a self-respecting country will indulge in.

Why for example, does a Governor need a retinue of ten, 15 vehicles to follow him anytime he is on an official assignment? Apart from the sheer waste of manpower—assuming they have anything better to do—there is the maintenance cost and replacement cost to the vehicles. And anytime a governor is going to receive an award however bogus, he goes with a plane load of followers. These are just wasteful.

Finally, any governor who cannot pay workers’ wages is a failure. And any Governor whose only boast is that he can pay salaries is also a failure. A much improved wage structure is possible if we can learn to cut the fat which starts with the excesses of the political class.