Minimum Wage: The adjustment imbroglio

By Femi Ogunshola, NAN

The Senate on March 19 approved ₦30,000 as the new national minimum wage bypassing the National Minimum Wage Act (Repeal & Enactment) Bill 2019.

On April 18, President Muhammadu Buhari signed the bill into law, thereby making it compulsory for employers of labour to pay the new wage.

However, the implementation across board is still in limbo.

While junior workers from grade levels 1 to 6 have started receiving the new wage, others from grade levels 7 to 17 are yet to see a ray of hope.

The Minister of Labour and Employment, Dr Chris Ngige, while admitting the hiccups in the implementation, noted that the only issue at stake for the implementation was from grade levels 7 to 17.

According to the minister, the issue requires a consequential adjustment, which is still being negotiated.

He said that the Federal Government cannot pay the 32 per cent being demanded by organised labour.

Mr Ngige said that if the government bowed to labour’s demand, it would increase the wage bill to N580 billion, and may lead to retrenchment of workers.

The minister stated that the Federal Government was avoiding a situation where it would have to lay off workers, noting that throwing workers into the unemployment market would add to their burden.

He pleaded with labour to accept the consequential adjustment for levels 7 to 17, adding that government had only three months left to implement the new wage.

The journey to the eventual implementation of the new minimum wage was tortuous, with hiccups and attendant expectations from Nigerian workers.

Several committees were set up by the Federal Government to negotiate with organised labour what it considered feasible to offer grade levels 7 to 17.

On May 14, the Federal Government inaugurated the Relativity/Consequential Adjustment Committee, which in turn set up a Technical Sub-Committee to work out the template for the adjustment of salaries of public service employees.

Anchaver Simon, acting Chairman, Trade Union Side, TUS, of the Joint National Public Service Negotiating Council, JNPSNC, noted that the TUS initially proposed a 66.66 per cent increase across board.

According to him, since the minimum wage was increased by 66.66 per cent from N18, 000 to N30, 000, salaries for officers on grade levels 01-17 should be adjusted accordingly.

This he said was to maintain the relativity that exists in the salary structure in the Public Service.
However, the National Salaries, Income and Wages Commission stated that such increase across board would raise the total wage bill too high.

The TUS, therefore, reviewed its demand downward and eventually settled for 30 per cent for officers on grade levels 07-14, and 25 per cent for those on grade levels 15-17.

However, the government side insisted on 9.5 per cent salary increase for employees on grade levels 07-14, and five per cent for those on grade levels 15-17.

The government’s offer was not acceptable to organised labour, that threatened to embark on a nationwide strike from Oct. 16, if the Federal Government fails to reconvene the meeting of the committee negotiating the consequential adjustment.

Dr Samuel Akanbi, an economist and financial analyst, noted that the economic implication of paying the N30, 000 minimum wage, would be a huge burden on the government.

He urged the government to look at other means of generating fund to meet the demand of Nigeria workers in order to fulfill its own part of the agreement.

The economist stated that there are many untapped resources that the government could leverage upon to generate more revenue for the government.

Quadri Olaleye, the President of the Trade Union Congress, TUC, while reacting to the delay on the implementation of the national minimum wage, said that the government was being smart.

He said that the present approach tended to divide the workers.

According to him, the government is playing smart and this is an attempt to play a divide and rule policy, which according to him will not work because the consequential adjustment arising from the wage increase is alien to the labour union.

Mr Godwin Segun, a retired banker, observed that the current national minimum wage of ₦18,000 was calculated based on the cost of living at the time it was approved and implemented in 2011.

He stated that when the N18,000 minimum wage was agreed upon, inflation rate was double digits, noting however that the inflation pressure was tamed in the years that followed as the economy also improved.

The banker noted that, since that time, Nigeria has suffered a recession and gone back to double digit inflation.