MINIMUM WAGE AND OUR PERPETUAL FAILURE TO BE PROACTIVE.
“FG approves N30,000 for its staff”.
“National Council of States recommends N27,000.”
AIT, January 23, 2019.
Insanity has been described by sages elsewhere as “doing the same thing all over again and expecting a different result.”. The last time the nation and a coming election was hostage to dispute over Minimum Wage negotiations, the President was Jonathan and the ruling party was the Peoples Democratic Party, PDP. Then, as now, the Federal Government, FG, and state governments waited until the last few days to election before hastily reaching an agreement. Suddenly, political leaders at federal and state levels, who had been lethargic about the matter acted speedily to avert the consequences of failing to hold elections. On January 22, 2019, the FG and the National Council of States, NCS, suddenly woke up to the fact that the request of the organised Labour for a new Minimum Wage must be addressed. The FG approved N30,000 for its staff and the NCS recommended N27,000 apparently nationwide. That the FG and NCS waited until another election is threatened demonstrates the collective inability of leaders to learn from previous mistakes. Some observations are pertinent in this regard because they point to the insincerity of the leaders. The Governors and legislators will also soon cave in. But, they have not addressed the implementation of the new MW and how to fund it.
For instance, a 20 per cent inflation rate will certainly wipe out any gains made by the wage increase in less than five years. Obviously, a responsible government does not need to wait until elections are threatened to address agitation for new Minimum Wage. Despite their own flight from reality, Labour organisations placed the Minimum Wage matter on the national agenda more than two years ago. The Federal and State governments had all the time in the world to study the issue and reach a feasible agreement with workers long before now. Why they chose to wait until January 22, 2019 to approve an amount is a mystery nobody else can unravel. But, it is disgraceful.
Obviously, when the FG approved so late, and in the middle of campaigns involving most of the members of the National Assembly, NASS, it cannot actually expect the “approval” which has not been presented as a bill to be passed before the elections. Labour organisations will be self-deluded if they expect a new Minimum Wage Act to be passed in less than twenty five days. And, if the FG’s recommendations are not passed into law by election day, organised Labour would have lost its most potent weapon and the Minimum Wage recommendations of the FG and the NCS might be nothing more than a waste of time on the part of government and a mirage by labour.
Clearly, there are several obstacles to overcome before the Nigerian worker will receive the first enhanced pay. For a start, the divergence, even small as it is, between the FG and NCS, has opened the door for other stakeholders – especially state governors – to propose other figures. And, they will be justified; despite the pervasive belief that “states can pay”. Neither the FG nor the NCS has provided the basis for the wages proposed. Certainly, everybody realises that Minimum Wage is basically an economic, and not, a political matter. Our starting point should be quantitative analysis in order to arrive at a range of possibilities before socio-political considerations are introduced. An illustration will help to establish that point.
Virtually all those most vocal about the Minimum Wage talk as if only the lowest paid worker will receive the increase from N18,000 to N30,000 or N27,000 – that is 16.7 or 15 per cent increase. For every government, FG, States or Local Governments, it should be possible to work out what the increase to their wage bill will be. But, the matter is more complicated than that. Raising the wages of the gateman, level 1 and grade 1, from N18,000 to either N30,000 or N27,000 will propel them above workers now several grades and levels higher. Obviously, it will make no sense to pay Level 1 workers more than level 4 officers. In short, Minimum Wage calls for a total upward adjustment of wages for everybody up to Permanent Secretary.
In that case, one of the most important questions is: must the same percentage increase be added to every level or should the percentage increases be tapered as you go up? The answer must be quantitative not political. Additionally, some other entitlements are percentages of the basic salary or wage. Obviously, increased base wage means higher entitlements.
It is only when these quantitative analyses have been undertaken that every stakeholder works with the same set of figures. It is only then that everyone can determine whether or not states can pay and still retain their staff or pay and retrench. Organised Labour leaders asserting that states can pay and governors who cannot pay must resign are talking rubbish. They have failed to prove the point. For them to be credible, the Labour leaders will have to prove that all the thirty six states of Nigeria and all the Local Governments can pay. It is totally unacceptable for people to sit in Abuja and Lagos and make unsubstantiated assumptions about the ability of all the states to pay. They must prove that all 36 can pay. Otherwise, they will have to accept the fact that some states might not be able to pay; and even those who might pay will have to allocate more funds to paying public servants and less to other social needs. There is a major problem with that.
In no state do public servants constitute more than two per cent of the population. At the moment remuneration of civil servants gulps close to sixty per cent of total revenue. A situation in which two per cent of the residents enjoy more than half of the income is hardly equitable. Now, like David Copperfield, they want more. Giving them more will mean less for the silent majority or 98 per cent. But, given their unacceptable selfishness, they assume that only their interest matters.
Right now, there are millions of workers in the un-organised private sector earning less than the current Minimum Wage. A survey conducted in Lagos Island by ad hoc staff recruited by me revealed that less than a dozen private nursery and primary schools pay their teachers up to N18,000 per month. Filling station attendants are not better off and few drivers as well as sales staff of marketing companies collect that amount per month. Are they not workers? Why has the leadership of organised Labour, the FG and NCS never included this vast army of workers in their negotiations? They shop in the same markets, pay the same rent and transport fares. Yet, no Labour leader gives a damn about them. They pretend to fight for “workers” while ignoring the vast majority; and unfortunately, my Fellow Countrymen, mostly fools, support Labour’s self-centred agenda. They never ask: what is in it for me? Right now, the answer to that question is “nothing”. The largesse is only for the few.
One thing is almost certain. The FG will probably send a hastily and badly drafted Minimum Wage Bill to the NASS; who in turn might either not work on it before the election or hastily pass it to avoid being blamed for it. Governors and States Houses of Assembly will go through the same motion. Elections will hold. After that Labour will discover that it has been swindled. Few states will pay either N27,000 or N30,000. The crisis which governors predicted will occur soon enough – irrespective of who gets elected in February.