Minimum wage monkey business causing maximum outrage
While many state governors find payment of the minimum wage an undeserved source of distress, workers consider the refusal of the governors to pay workers’ entitlements as a source of utmost anger. Tension is rising between workers and some state governors, who say they cannot afford to pay the national minimum wage that was negotiated and signed into law in 2011.
The chairperson of the Nigerian Governors’ Forum (NGF) and Zamfara State Governor Abdula’aziz Yari sparked the controversy that could lead to a confrontation between organised labour and the Federal and state governments when he announced that governors could no longer pay the minimum wage that was agreed to four years ago when the price of oil was about $126 compared to its present price of about $40 per barrel of oil.
I must say it is completely illogical for the governors to use oil price disparity as a basis to back down on an agreement that was made between Federal and state governments and workers. The reference to oil price is nonsensical and a flawed argument. The analysis is hollow because, in the first place, when the minimum wage was negotiated, oil price was not the plank on which the wage was fixed. Second, state governors do not sell Nigeria’s oil. Third, while oil serves as Nigeria’s main foreign exchange earner, it is not the only source of foreign income.
Why the governors should use oil price disparity, as a basis to flag their intention to abandon the national minimum wage agreement is unthinkable. We must keep in mind that the national minimum wage was negotiated, agreed, and signed into law in 2011 between the Federal and state governments, the Nigeria Employers’ Consultative Association (NECA) that represents employers in the private sector, and organised labour represented by the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC). This shows the state governors do not have the sole right to choose when to switch off paying workers their minimum wage or when to reduce the minimum wage paid to workers.
NGF chairperson, Abdul’aziz Yari said at the end of a meeting of the governors: “We resolved that we must look at ways to enhance revenue generation and at the same time look at ways to cut our overhead costs, more especially the political office holders’ salaries and other overhead expenses.”
Cutting overhead costs is what the governors should be doing rather than looking at further constraining the welfare of workers who struggle to make ends meet even with the minimum wage. Governors are obligated to provide for the welfare, wellbeing, security, and safety of workers. Workers’ wages should not be used by governors to overcome burgeoning overhead costs and to cushion economic and financial shocks.
Whatever the governors do, reducing the salary of workers should never be an option. The national minimum wage was negotiated. It was agreed to by all parties. It was signed into law by former President Goodluck Jonathan. The agreement was not based on the condition that governors could change the minimum wage if the oil price took a tumble.
After that protracted minimum wage negotiation between the Federal Government, state governments, and organised labour that took place in Abuja in July 2011, I argued at the time that what some people had considered to be an amicable resolution of a knotty problem was nothing but trouble postponed. Four years on, my prediction is beginning to look justifiable.
Backing out of the minimum wage agreement now would portray the governors as capricious, unreliable, mean-spirited, erratic, untrustworthy, inconsiderate, and insensitive. Edo State Governor Adams Oshiomhole has already cautioned the governors trying to back out of the minimum wage. He said doing so could have deleterious consequences on the economy of the states, the welfare of the citizens, and the likelihood that it could lead to an undercurrent of tension between civil society and governments at state and federal levels. An agreement is an agreement and must be respected. Oshiomhole reminded the governors that the national minimum wage was not imposed on them but was the outcome of a prolonged negotiation between several parties.
He said: “I believe that the issue in the economy hasn’t got to do with minimum wage. I have always also reminded my colleagues that the minimum wage was not imposed, it was negotiated and state governments agreed to it, the president signed it not under duress, there was no strike to compel the then president to sign it, he signed it voluntarily.”
The most effective, logical and sound argument that Oshiomhole made occurred when he said: “I believe when you look at the minimum wage, as it is today at N18,000, it is less than 100 dollars. I think it is now about eighty dollars. Now, divide eighty dollars by 31 days, you will be getting about two point something dollars… Now we cannot argue that workers in Nigeria’s formal sector should not earn more than two dollars a day, I cannot subscribe to that because the heart of governance is the welfare of the people.”
The Nigerian Governors’ Forum does not seem to realise that at N18,000 per month, the lowest paid workers in the country are already living below the poverty line by all standards. Governments at Federal and state levels are duty-bound under our labour laws to pay the minimum wage.
If the economy is experiencing turbulence, if the nation’s finances are on a shaky ground, if governors cannot find efficient and cost-effective ways to manage their states, it is not because workers’ remuneration has blown out of budgetary estimates and therefore consumed the states’ resources.
Governors are unable to pay workers’ wages because they have been misplacing their priorities and allocating limited funds to spurious projects that do not contribute to improvements in the living conditions of the citizens.
What is going on now is simply the outcome of failure to clarify the fine points or details of the minimum wage when the Federal and state governments signed the deal with labour leaders. For example, in 2011 when the agreement was signed, there was no clarity about when payment of the minimum wage would start or the category of workers who would benefit from the wage.
Negotiators from the Federal and state governments, and labour representatives committed a fundamental error of judgment when they failed to sort out details of the agreement. It was that lapse in precision and clarity in 2011 that fed the ensuing public debate, which spawned the confusion about the class of workers who should receive the minimum wage and the exact date when payment would commence.
The Federal Government poured water on the agreement it reached with labour leaders when it said on Monday, 18 July 2011, that it would not start full payment of the minimum wage till 2012, nearly six months after the agreement was signed. Not only did that amendment provoke labour leaders and upset ordinary workers across the country, that decision by the government to go back on its words also showed the government was playing hide-and-seek and therefore did not negotiate the minimum wage in good faith.
The government justified its decision to start payment of minimum wage in 2012 on the ground that money meant to be used to pay the wage was not provided for in the 2011 budget. The government further argued that the National Assembly would have to legalise the payment of the minimum wage by passing a new budget that would become effective from 2012.
The idea that payment of the minimum wage had to wait till the following year was not broached during negotiations and so it was not something the labour leaders envisaged. Additionally, the clarification given by the Federal Government that only workers on levels 1 to 6 would receive the minimum wage seemed to be something that dropped from the skies as it was not raised during negotiations.
I hold the government as much as labour leaders responsible for fanning the unresolved issues that continue to spark industrial relations disarray across the country. As I have always argued, state governments must uphold the terms and conditions of the minimum wage deal that was struck four years ago. No attempt should be made to alter, vary, or desecrate any part of that agreement. After all, when the minimum wage agreement was signed in 2011, no government official was blindfolded and no labour leader wore blinkers.
State governments should never argue that they cannot pay the minimum wage of N18, 000 every month to the lowest paid workers because they lack the financial capacity to do so. The minimum wage really is miserable and inadequate. That amount is insufficient to allow any lowest paid worker to take care of their financial commitments.
In 2011, during negotiations for the minimum wage, Governor Isa Yuguda of Bauchi State admitted openly that the minimum wage could not take care of the needs of a family of four every month. He told journalists in Abuja on 19 July 2011: “In fact, N18, 000 is too small for an average Nigerian worker, but the problem is that of availability of funds.” What nonsense! If the minimum wage were too small to support an average worker, you would expect state governors to pay the wage so as to help workers to ease the hassles of everyday living.
It is quite paradoxical that state governors who have no difficulty finding money to fund bogus projects are now complaining that they are unable to find money to pay workers their minimum wage. It is time the governors ended this monkey business.
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