Nigeria: Contrived Delay in the Take Off of New Minimum Wage

Photo: Vanguard
7 August 2019

More than three months after President Muhammadu Buhari signed the new minimum wage bill into law, workers in the country are yet to begin to benefit from the increment.

We recall that so much euphoria greeted the announcement of the new minimum wage on April 18, 2019 after almost three years of negotiations between government, labour unions and private sector employers. Labour was led by the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC), while on the government side were officials of both the federal and state governments.

The federal government on May 14 inaugurated a committee chaired by the Head of the Civil Service of the Federation, Mrs Winifred Oyo-Ita, to negotiate the consequential adjustment in salaries arising from the new National Minimum Wage. While inaugurating the committee, Secretary to the Government of the Federation (SGF), Mr Boss Mustapha, who was an alternate chairman of the committee, said that the committee had four weeks to complete its assignment with the inaugural meeting scheduled to hold on May 20, 2019.

Four weeks have already elapsed and the committee is yet to come up with its report. There has been disagreement between members of the committee over what should accrue to workers as a result of the consequential adjustment of salaries to conform to the new minimum wage. This has stalled the process of implementation. Initially, the federal government had proposed to add a fixed amount of N10, 000 to the salaries of all workers from Grade Level 1 Step 2 to Grade Level 17 Step 11.

However, the government later insisted on 9.5 percent salary adjustment for workers on grade levels 07-14 and five percent for those on grade levels 15-17. However, labour on its part insisted on 30 percent for officers on grade levels 07-14 and 25 percent for officers on grade levels 15-17. This disagreement has led to the suspension of the committee's deliberations indefinitely.

It is our view that while government on the one hand has tried to justify its reason not to shift ground, it should consider the plight of workers already affected by the adjustments. The government's argument is that if it yielded to the 30 per cent increment being asked by labour, some workers at the higher rungs of the ladder will get salary increments of up to N100,000 just because N12,000 (from N18,000 to N30,000) was added for workers at the lowest rung.

Labour on the other, however, argues that based on the percentage increment being negotiated by government, a worker on grade level 7 step 8 will only get an increment of 5,000 which is N11, 000 less than the N16, 000 being canvassed by organized labour.

It is important to point out that with the long and heated negotiation for the new national minimum wage, the long delay in signing it into law and all the publicity that has attended the process - all these have resulted in increment in the prices of foodstuff, rents and other social services by those who are not much aware of the intricacies involved in the wage increment.

It is our view that the delay in the commencement of the new minimum wage is already having a negative impact on the workers who are supposed to be uplifted from their poor living conditions by the policy. However, it is pertinent to stress that the new wage officially commenced on April 18, 2019 when the President signed it into law.

What this implies is that the government already owes the workers a backlog of arrears. The longer the negotiation on consequential adjustment takes, the more the backlog of arrears will leave a huge debt burden on government. There is the need to speed up the process of implementation because if it lingers, a new industrial dispute may unnecessarily become rife. Workers are justifiably likely to begin to demand the payment of these arears with a possibility of another industrial action coming into the bargain. The implication of this is that government business, in particular, and the overall economy, in general, will be exposed to undue disruption.

It is our hope that all the parties involved in the negotiation will see the urgent need to seek a middle ground so that workers can begin to enjoy the new wage.

As a newspaper, we also advise that future wage increment processes should be done discretely so that Shylock landlords and other market forces do not take away any gains workers may get for their efforts.

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