The Nigeria Labour Congress (NLC)’s demand for a new minimum wage of N615,000 per month for civil servants, following the current economic hardship bedevilling the citizenry, has been a controversial phenomenon because the government’s capacity or readiness to meet the demand is dicey.
The controversy has set both the government and organized Labour on a head-on collision, especially because some state governments have been struggling to pay the current N30,000 minimum wage and organized labour has given May ending as the deadline for the government to meet its demand.
Is organized labour’s demand justified? Will it be able to get the desired report? Does the government have the financial muscle to meet the demand? Even if it has, does it see any justification in the demand and be willing to meet it?
A spectrum of Nigerians, including sociopolitical, economic, and financial experts bear their minds on the issue and the way forward.
The founder and president of Project Victory Call Initiative aka PVC Naija, an NGO that anchors political education and advocacy, Doctor Bolaji Akinyemi, premised the government’s fulfillment of organized labour’s demand on the availability of funds.
He urged the government not to turn deaf ears to the demand because the pay rise is overdue, has become imperative, and be paid based on the resources available.
“It’s one thing to be realistic and it’s another thing to be objective. I see the position of NLC and TUC from an objectivity point of view,” Dr Akinyemi said.
He added: “The organised labour used the cost of living as an index to calculate and arrived at N615,000. The breakdown is even an underestimation because if Labour says accommodation is 40k per month which translates to 480k per annum, that must be for a bachelor or bachelorette.
A family of four would need at least a two-bedroom apartment which is not less than N1 million in most Nigerian towns. However, Labour’s position is more of objectivity than reality.”
On the fate of workers in the private sector, he said: “Workers in the private sector also belong to the NLC by proxy, except those enslaved by the “no unionism” rule in their organisations. I see the taskmaster in the employers of labour raising its ugly head. They are either silenced by the threat of losing their jobs if they demand for a pay rise or an outright downsizing to accommodate the increment.”
On whether the organised labour’s demand is reasonable, Dr. Adeyemi said: “Labour believes that its demand is based on reasonable and acceptable statistics. That’s what I earlier referred to as objectivity. The onus now is on the government to respond based on availability and capacity! I believe that both sides would shift ground.”
“I advise the government to effect a downward review of the lawmakers’ and political appointees’ salaries. The disparity between them and other workers is too much. That is why any right-thinking individual would pitch his or her tent with the Labour and TUC on their demand.”
Former president of Kwara Chamber of Commerce, Industry, Mines, and Agriculture, Dr Ahmed Raji, dismissed Labour’s demand in view of the current state of the nation’s economy.
According to him, implementing such a significant increase could aggravate the current inflation orchestrated by high costs of goods and services and job losses.
“Workers in the private sector may face uncertainty, as companies may struggle to cope with increased labour costs and unemployment, business closures, particularly among small and medium-sized enterprises (SMEs),” Raji said.
He added: “It is highly unlikely that state governments struggling to pay the current minimum wage of N30,000 can afford the proposed N615,000. Payment of N650,000 could lead to further financial strain, potential defaults or even bankruptcy.
On the way forward, Raji said: “An increment tied to economic growth and productivity might be a more sustainable solution.”
“It’s crucial to consider the broader economic implications and seek a more balanced solution that works for both workers and employers.”
The Executive Director of Nigerian Workforce Strategy and Enlightenment Centre (NIWOSEC), Dr David Ehindero, said: “Such a sharp increase could have a shocking effect on the economy, leading to higher prices of goods, potential job losses in the private sector, and increased overhead costs for businesses.
A moderate figure like N120,000 as a reasonable compromise demonstrates an understanding of the need to balance the demands of workers with the economic sustainability of businesses. This approach shows a practical consideration for both sides of the equation.
The Director-General, Kwara ALGON, Prince Yemi Adurotoye, rued labour’s agitation, saying implementation of its demand might trigger more inflation.
He said: “The mere mention of minimum wage increase has made traders in the market jerk up prices of commodities, while transporters too will increase fares, house rents will skyrocket, service charges will climb to the rooftop and the trend goes on and on.”
On the way out, he said: “The organised labour should demand implementation of policies such as free education to a certain high level, free health care, subsidized transportation and subsidized utilities being consumed by the masses. These are things that will alleviate the suffering of the common man on the street.
“Though one can argue that there is no equality in the labour market, it is quite unfortunate that most operators in the private sector wouldn’t be able to meet up with such minimum wage implementation. Hence, workers in the private sector will be feeling inferior, not catered for or shortchanged; whereas they are all Nigerians because they patronize the same market.
“The state government is likely to be the first to kick against it. Many of the states are still struggling to survive with the payment of the current N30,000 minimum wage.
“To face the reality, can a state that is finding it difficult to pay N30,000 minimum wage pay N615,000 as minimum wage?
A Financial Consultant and Economic Policy Advocate, Chief Olorunbe Bello has advised organised labour and the Federal Government to strike a balance to make workers happy.
“In the private sector, where businesses operate within tight profit margins, a sudden increase in labour costs could lead to a significant malaise. Employers might be forced to cut jobs or employee benefits. This could have adverse effects on employment rates and overall economic stability,” he said.
“Since state governments are already struggling to pay the existing minimum wage of N30,000, the proposed N615,000 increase would pose a monumental challenge. Implementing such a drastic increase could further stress the already stretched budgets. This may result in a decline in public services and infrastructure development.”
