President of the Nigeria Labour Congress, NLC, Mr. Joe Ajaero, and Managing Director of Financial Derivatives Company, Mr. Bismarck Rewane, at this year's annual Vanguard Economic Discourse, traded words over Organised Labour's N615,000 minimum wage demand which has been reduced to N497,000.
While Mr Rewane contended that the minimum wage being demanded by Labour was not feasible, Ajaero insisted that the demand is in line with the socio-economic realities of Nigeria at the moment.
This came as the Presidency yesterday said the N497,000 demand by Labour as the new minimum wage was unrealistic and advised labour to be serious in its demand.
Speaking in his opening remarks at the summit, Ajaero, who was a panelist at the discourse, posited that the prices of most essential items and other services from transportation, and electricity to food had skyrocketed.
He said: "From all that we have been discussing here, there is a benchmark which is the dollar; a common factor we use. The cost of living index determines the wages, I want you to benchmark it with probably a bag of rice, which is about N84,000 today.
"I will equally want you to ask people that refill their gas cylinders how much it costs them, maybe N16,000 or N17,000, and it is once or twice in a month which is about N30,000 plus. I would equally want you to benchmark it to a plate of 'Mama-put' (Roadside food vendor) at N500 without meat.
"When you do that, with a family of six, you are going to get N270,000 in a month. We can go on and on. I want you to equally look at the United Nations, UN, provision that no human being should live on less than $2 per day.
"For a family of six, that will amount to $12. Multiply it and it gives you $360, then convert it with the current exchange rate.
"Ordinarily, I would have asked you to convert this money to dollars and you will see that it translates to about $20 and that is the least all over the world.
"Do you want labour to suggest that people should live on less than $1, not even $2 per day?
'Living wage different from minimum wage'
If you match that with Mr President's position that he is going to give Nigerians a living wage, and a living wage, in actual fact is different from a minimum wage.
"A living wage is that which will keep you and your family, at least, for you to eat till the end of the month. The fact that you have so much devalued your naira to the point that it doesn't have weight gain should not make us not feed or go to work and not come back.
"No worker, including those in this hall today, goes to work and back without spending at least N2,000 a day. In a month, it is N60,000. Now check all these things and see whether a worker earning N615,000 in a month will have one naira in savings.
"We deliberately did not put communication. We deliberately did not put tithe, we assume that a worker does not have parents in our calculation. That is what brought us where we are today on the issue and on the premise that it creates inflation, I disagree with you because inflation is already here with us.
"It is a real wage that grows the economy because when workers earn, they purchase. When you increase the purchasing power of workers, the economy will grow and you have proper productivity.
"In Ghana, they review wages annually. If inflation is maybe three per cent, it is factored into it. Even in the United Kingdom, it is based on the level of inflation that they adjust wages. Yes, it is an index. If we have three per cent, it will be self-adjusted for that year.
"Even if you give us N615,000 for the next five years, it will be meaningless because if you are one of the people who prescribed this, it is weighing heavily on us."
During the panel discussion, the NLC President said: "We are talking about reserves. You cannot continue to talk about reserves when people are dying of poverty. What are you going to do with reserves? The purpose of any government is for the good of the people.
"Whether workers or ordinary citizens, if you are talking of reserves, saving money and economic policies that are forcing people into poverty, how do you reconcile it because one of the eight-point agenda of the President is to eradicate poverty?
"Again, by the time we came up with the issue of wage award for which they gave N35,000, an amount which is neither here nor there, we came up with some measures before the negotiation of minimum wage.
"We said can you adopt the Compressed Natural Gas, CNG, policy? The CNG issue came from us and we explained to them that the CNG option will help Nigeria and is eco-friendly.
In this option, if you are supposed to fill your car tank with N50,000 petrol, with N15,000, you will fill your tank if we apply CNG.
"If you do this, even with the cost of PMS then, the cost of transportation will go down and prices of other things will stop moving. However, the government preferred to have abortions before pregnancy.
"However, they said we prefer to deregulate and they removed the subsidy before looking at how to cushion the effect. One year later, that cushion has not come.
"We decided to adopt a palliative policy, that is what the government is in today. A government of palliatives, tell me of any other reform that is working. Even the palliatives they promised, they said it should be cash transfers to the most vulnerable. As of today, there has never been any cash transfer to anybody.
"You were talking of reserves; it looks like you are having a kind of situation where people are dying and you are keeping reserves. You did not mention the corruption figures in Nigeria in building reserves.
"Some of the reserves built in the past were looted. If you identify that point of having billions and billions being looted by people, you can't build reserves in the face of corruption. It is not possible. That is one vital point. Now that oil prices are going up, you cannot continue to refine abroad. "The period you are supposed to make money for your growth from oil, you are just importing refined products because no refinery is working in Nigeria, nothing is functioning.
"It is like a theory of producing cassava in your farm and you sell cassava to buy an illegal product.
"Now, between the time this last subsidy was removed and now, is Nigeria not paying more money in subsidy? Now we have to face reality. For sloganeering, we have removed the subsidy, while we are paying more subsidy.
"We should tell ourselves the truth. You know, there is no need to talk about reserves when they are going to completely loot the reserves.
"We cannot quickly forget the Justice Okigbo commission report on $12.4 billion missing oil windfall and whatnot. In this country, even when they take a loan, the loan disappears. Why can't we come out openly and discuss our problem? And look at the hitches which corruption is causing to proffer solutions."
Rewane contends
On his part, Mr Rewane, also a panellist at the event, said: "In 2019, the original proposal we met when former President Mohammad Buhari called us, I could recall, was N18,000, and the discussion was around N24,000. I think we moved it to N30,000 after all negotiations.
"When we came up, he said, I don't want any layoffs, I don't want any inflation, I don't want this, I don't want that. But what do you want? That was not there.
"In any case, we were able to resolve the issue. The data is very clear. What we did, N30,000 was the minimum wage, which covers 10 per cent more than N30,000 that the civil servants got.
"The equivalent at that time was about $75. So, for any other person, if you are on N18,000, you get N30,000. If you are a permanent secretary, whatever it is, you get N10,000 more.
And the data is here, inflation in 2019 was 11.4 per cent. Inflation in 2020, the year after, came down to six per cent.
"So, you can see that even though there was a wage review, which went from N18,000 to N30,000, inflation actually declined to six per cent. So, it was well managed, anticipated, and the discussion was very thorough and it happened in the month of the election. The president signed on April 18th.
"If you now dollarise the minimum wage, because the inflation has already been factored in the exchange rate, you dollarise the income. If you use the dollar value, you must also then use U.S. inflation. You cannot use the dollar value and then use the Nigeria inflation because that means that I am paying you in dollars.
"You now use US inflation, which is at 3.4 per cent now, and you take all the weight out of it. Let us say the US inflation from 2019 to now went up to about 9 per cent. So let us say everything put together was 15 per cent. If you take the dollar value add 15 per cent to that, and then bring it back, you will find that there is enough room for you to come up with a midpoint.
"Speaking about minimum wage, productivity in the US and our productivity in Nigeria are two different things. That is one.
"Two, the national minimum wage is a law that affects both the private sector and the public sector. It is a policy; it is not the economic plan, not the public plan. Government's contribution to the GDP is about 10 per cent.
"The private sector, the employers, also have to pay the minimum wage. They can only pay the minimum wage from the revenue they generate and you know the situation in this country. They do not want a situation which would lead to a recession.
"What I'm saying is that you negotiate the minimum wage, bearing in mind that it is not government and government workers. The private sector is also in.
"Look at the losses they have been declaring and these companies that are going to borrow money at higher interest rates are still going to pay higher minimum wage. We are very concerned about the growth of our investment."
Labour's N497,000 demand unrealistic -- Presidency
Meanwhile, the Presidency has said the N497,000 demand by organized labour as the new minimum wage is unrealistic and advised labour to be serious in its demand.
It also said what should be paramount in arriving at a new minimum wage by the tripartite committee on the new minimum wage should be the availability of resources to pay whatever was agreed upon.
Speaking exclusively to Vanguard in an interview in Abuja yesterday, Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga, said governments at the federal and state levels, have a bloated workforce.
Fielding questions on whether the recent N497,000 wage demand by organized labour was outrageous, Onanuga said: "Well, it's very simple. I think the demand is outrageous. If you ask Mr. Ajaero or our brother who is the President of the TUC, Osifo, how much they pay their drivers or their lowest-paid workers, how much do they pay their cleaners, can they pay them N500,000? Can they pay them N615,000? It's unrealistic.
"We have a bloated civil service at all levels. The government is keeping them as a social service because it doesn't have other jobs for them.
"The last time someone gave the census of federal civil servants, they are said to be about 50,000. I am not talking about the police, army or those employed by some agencies. I am talking about the hardcore civil servants.
"If you visit the federal secretariat, you will see them milling around. You do not expect much productivity from them. Yet these are people Ajaero wants the Federal Government to pay N615,000.
"At the moment, what government is spending on recurrent expenditure, is too high. I don't foresee any government, federal, state or local government council, spending all its money just to pay workers.
"There are still self-employed people, people who are doing their businesses to whom the government has responsibility to do roads, provide healthcare, provide education and others. So, labour should be realistic.
"From what I have seen so far, they are unserious, and unrealistic with their outlandish demand. I know that what the President has been promising is not just a minimum wage but a living wage.
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"It's too early now to say this is what the government will agree to. They are still negotiating. In the coming weeks, they will agree on a figure and then announce it to the Nigerian people.
"Then we have to be worried whether the states have the earning power to pay whatever the minimum wage agreed on because some states found it difficult to pay the old minimum wage of N30,000.
"I read a few days ago that the Zamfara State government, which failed to pay the N30,000 current minimum wage, announced that they will pay. If some states have not paid the minimum wage announced by President Muhammadu Buhari five years ago, it is an indication that the states will also fail to pay the new minimum wage. So labour needs to be realistic.
"In my view, I think what labour should be talking about is how to make affordable housing available, how to reduce transport costs, how to make food cheap and affordable to our people because by the time you spend less money on food, less money on transport, education and other things, the earning power will improve.
"I don't believe in the quantum of money, it will not solve the problem. We have seen all the wage Aincreases in the past. They ended up creating more frustration for the workers."
Rejiging cabinet not on the table
Asked if President Bola Tinubu would rejig his cabinet as the government marks one year in office on May 29, he said such was not on the card currently.
He said: "I don't have any information about that. The President, instead of approving a lavish anniversary, asked the ministers to go out and give their scorecards.
"Some of them have done so. We started on Thursday and Friday and we are taking more ministers on Monday. It will run until we exhaust all the major ministers who have stories to tell, who have scorecards to present.
"I am not aware whether the President is entertaining removing some ministers. Don't forget, those ministers are not one year old, they came in I think late August and they have barely spent nine months or so in government. "The President would want to give them some time to show whether they are performing or not."
Further asked about his assessment and whether the ministers had lived up to their responsibilities, Onanuga said a good number of the cabinet members had so far discharged their responsibilities creditably.
"Many of them have done wonderfully well. All of them cannot be on the same level. It depends on what you are doing in your ministry, the kind of subjects you are superintending and so on. But I can say many of them have done well, many of them have been eager to implement the President's 8-Point Agenda as it relates to the work they are doing in their ministries. I can say many of them have done well," he added.
Asked how much he would suggest as a fair minimum wage to workers, he insisted that should be based on the available resources to the government.
