As the president and state governors slow-roll on the N30,000 minimum wage, organised labor is poised to go on “a prolonged strike”.
It is unfortunate that workers have to resort to strikes and threats of a strike to prop government attention to their poor wages despite the explicit recommendation in the National Minimum Wage Act (amendment) 2011 for an upward review every 5 years.
As for the current minimum wage which is more than overdue for upward review, it is but a starvation wage. Sadly, most workers do not even earn close to the N18,000 ‘starvation wage’ as they are paid wages far lower.
Meanwhile, food prices are going up, health care costs are going up, child care costs are going up, education costs are going up, and house rents are going up. But wages remain stagnant. For workers to live in dignity in today's economy, there's a need for a significant boost in their pay.
The argument against the new minimum wage from some quarters is that it could potentially lead to runaway inflation, and job losses; and, of course, the state governors are making the flimsy and sour excuse that they do not have adequate funds to pay increased wage bills.
Insofar as these concerns are welcome, yet there's no gainsaying they are mostly unfounded and immoral. When the minimum wage was raised to N7,500 in 2003, inflation only grew marginally by 0.97 percent in 2004. The following four years, however, it actually fell to 5.38 percent (from 14.03 in 2003). More jobs were also added to the economy. Similarly, when the minimum wage was doubled to N18,000 in 2011, we experienced a -2.78 cumulative growth in inflation for the following four years.
The other point is that the new minimum wage would not only help the millions of workers and their families, but also provide a much-needed boost to our economy. Less than 17 percent of Nigeria’s GDP is dependent upon the purchasing power of consumers. If workers, especially low-wage workers, have more money in their pockets, they’ll spend that money on farm produce, shops, barbers, boutiques, restaurants, and businesses throughout the country. All these new businesses give companies a reason to expand and hire more workers.
Not convinced? Hear what the central bank said: “Given the negative output gap, the proposed increase in the national minimum wage would stimulate output growth due to prolonged weak aggregate demand arising from salary arrears and contractor debt”.
So, obviously, the wage increase would be a win-win-win for our economy: Poverty is reduced, new jobs are created, and the growing income inequality is reduced.
Taking the argument even further, there’s the moral and economic basis that if you work for 160 hours, you ought not to live in absolute poverty. But can we confidently say of this about our low-wage workers — the cleaners that clean our offices; the guards who protect buildings, the ones that open the door as you walk through a Mr. Biggs restaurant and the employees who work there; the janitors and groundskeepers who clean government office buildings, take out garbage, and mow lawns; the local government workers, etc?
It is worth noting also that a distinction exists even in this class of workers. In the public sector, the minimum wage (I prefer to call it starvation wage) do not apply universally. Local government workers (e.g. in Zamfara State), and others earn lower wages. For those employed in private companies with the same job description and qualification, on the other hand, too many instances earn even far below the minimum wage.
(The federal government must close every loophole and come heavily on public and private employers that pay wages below the national minimum rate.)
Though money seems to be the main story, it’s not the whole story. The other part of the story is that this group of workers is also in the lowest rung on the ladder of social status. They suffer from depression, are more prone to suffer from anxiety, and chronic pain.
That workers in the country are shortchanged and treated like slaves is bad enough. But to watch the government dilly-dally on the approval of the new minimum wage is not just appalling, but savagely unfair. Workers in Nigeria deserve a better deal from the government than they are getting.
In fact, what should be on the table for negotiation is a living wage? N100,000 living wage tied to cost-of-living increases implemented in the next 10 years.
As for state governors making excuses, I berate them for their shortsightedness, laziness, and greed. Any governor that will not commit to workers welfare should simply resign, as the president of Nigerian Labour Congress had wisely admonished.
Tweet summary: workers are paid wages barely enough to live by — which is inexplicably wrong. Most important, the increased minimum wage is good for the economy.
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