Leave the pay, trim the fat

A big confrontation between state governors and Nigerian workers may be on the horizon, from all indications. The governors who recently met under the auspices of the Nigeria Governors’ Forum (NGF) declared that they may be unable to sustain the current national minimum wage for workers in their states. They said the wage was fixed […]

A big confrontation between state governors and Nigerian workers may be on the horizon, from all indications. The governors who recently met under the auspices of the Nigeria Governors’ Forum (NGF) declared that they may be unable to sustain the current national minimum wage for workers in their states. They said the wage was fixed when crude oil sold for $126 per barrel but has now nosedived to $41 a barrel.
The Nigeria Labour Congress (NLC) reacted harshly to this declaration. NLC’s President Mr. Ayuba Wabba said any attempt to slash the national minimum wage of N18,000 “amounts to a declaration of war.”  He said the 2011 National Minimum Wage Act was enacted after two years of agitation and negotiations by the tripartite of government (both federal and state governments), organized labour and the Nigeria Employers Consultative Association, NECA which represents the organized private sector. Wabba said labour actually requested for N52,000 as minimum wage, saying this was the amount a worker and his dependents needed to be able to live a healthy life in a month.
According to him, it was out of NLC’s “patriotic disposition and consideration” that the union reluctantly agreed to the N18,000 offered by government even though they deemed it grossly inadequate. Wabba said the figures submitted by many state governments to the tripartite negotiating committee were far above the N18,000 that was finally agreed upon. He said state governors cannot therefore be taken seriously when they say that the current national minimum wage was “imposed” on them.
Part of the problem we have in this matter is the use of terms. Minimum wage means the lowest remuneration employers may pay to workers monthly; it is the price floor below which workers may not sell their labour. Problem is that when a national minimum wage is adopted in Nigeria, government proceeds and works out a pro-rata increase for all other levels of workers. When a state governor says he is having problems paying “minimum wage,” he is referring to his government’s entire wage bill, not just the wages paid to the lowest paid workers. “Minimum wage” here includes salaries paid to GL 17 workers as well as Special Scale salaries paid to permanent secretaries, commissioners and legislators. The gap between NLC’s position and that of the governors is therefore not as wide as it seems.
Nothing should ever be done to reduce the national minimum wage bill below what it is now. Given the cost of living in Nigeria today, N18,000 is inadequate to sustain even a worker that has no dependents since his feeding, transportation and house rent for 30 days are all to be disbursed from the same amount. A cut in the minimum salary should therefore not be contemplated by the governors. If any reduction in the wage bill must be considered, they can look at the highest paid workers, not the lowest paid ones. With the current anti-corruption fight of President Muhammadu Buhari’s administration, any attempt to lower the national minimum wage will be counterproductive and would empower corruption rather than kill it.
As a matter of fact, the national minimum wage is overdue for an increase because N18,000 is far, far below what any family can live on in a Nigerian town or city. However, since the governors are having difficulties with their overall wage bills and other overhead costs, they should start by trimming the fat. They should cut down on the number of their political aides and their perquisites. They should reduce the number of their overseas trips. They should reduce the number of vehicles in their convoys; reduce the number of government guest houses they maintain in different cities and cut down on politically-motivated sponsorship of pilgrimages and ceremonies. When they do that, they will find out that they have enough money to pay their lowest paid workers a take-home pay that will actually take them home.