N200,000 minimum wage no longer realistic – Labour

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The Nigerian Labour Congress said on Tuesday that the N200,000 minimum wage it earlier proposed to the Federal Government was no longer realistic, given the current economic conditions in the country.

The congress, represented by its National Vice President, Tommy Etim, responded to Tuesday’s inauguration of the Minimum Wage Committee by Vice President Kashim Shettima.

In an exclusive interview with The PUNCH on Tuesday, Etim emphasized that the congress would anchor its negotiations for the national minimum wage on the present economic conditions rather than sticking to its initial proposal.

He said, “You are aware that when we opted for the N200,000, the socio-economic challenges were not as biting as they are now. And when you now look at the exchange rate, it was not what it is now. The naira rate not been devalued as it is now. So, N200,000 is no longer tenable.”

When our correspondent asked whether there was a minimum figure the congress would take along to the committee, Etim said, “We are not going there with a fixed amount, but definitely not N200,000. By the time we get there, we will decide based on the socio-economic situation. That’s what we are going to base our national minimum wage discussion and negotiation on.”

The 37-member wage committee, tasked by the Federal Government, received an earlier directive to expedite its discussions and promptly submit recommendations.

The Ministry of Finance was directed to ensure adequate funding, and a call for genuine collective bargaining was emphasized. The importance of adhering to contracts was underscored, along with encouragement for committee members to seek external input beyond their ranks.

Comprising representatives from federal and state governments, the private sector, and organized labor, the panel’s mandate is to propose a new national minimum wage for the country.

To ensure sustainability across all government levels, President Bola Tinubu emphasized that the committee must consider the financial capacity of all parties to implement the new wage.

He urged the committee members, represented by the Vice President during the inauguration at the Council Chamber of the State House in Abuja, to ensure the timely completion of their assignment.

“The committee is anticipated to conclude its deliberations promptly and submit its report and recommendations.

“This timely submission is crucial to initiate the necessary processes for implementing a new National Minimum Wage.

“The Honourable Minister of Finance and Coordinating Minister of the Economy has been instructed to allocate the essential funds and logistics to the Committee, facilitating the timely completion of its assigned task. I hereby inaugurate the Tripartite Committee on National Minimum Wage and extend my best wishes for fruitful deliberations,” declared the President.

The inauguration on Tuesday comes after months of organized labor’s agitation, expressing concerns about the Federal Government’s failure to establish the new national minimum wage committee, as promised during negotiations last October.

In May 2017, the House of Representatives took steps to amend the National Minimum Wage Act, requiring a mandatory review of workers’ remuneration every five years.

Consequently, the Minimum Wage Act of 2019, signed by former President Muhammadu Buhari, grants authority to the committee to deliberate and propose an agreed wage, subject to ratification by the National Assembly after thorough legislative scrutiny.

In the same year, Buhari signed the Minimum Wage Act approving N30,000 for federal and state workers. However, Tinubu announced the discontinuation of fuel subsidies on May 29, 2023, leading to a significant increase in the overall cost of living.

Despite the administration’s approval of an additional N35,000 wage award for six months, starting September 2023, to mitigate the impact of subsidy removal, organized labor insisted that this was only a temporary solution and called for a comprehensive review of the minimum wage in 2024.

The President said his administration hopes to surpass the basic Social Protection Floor for all Nigerian workers, considering the sustainable payment capacity of each tier of government and other employers or businesses.

He explained why: “I express this viewpoint because the minimum wage represents the least amount of compensation an employee should receive for their labour, and as such, it should be rooted in social justice and equity.”

“I hope that the results of your deliberations will be consensual and acceptable to all parties involved,” the President told members of the committee.

He reaffirmed his administration’s promise to improve the welfare of Nigerian workers and, by extension, the entire nation, saying, “The labour force stands as the cornerstone of the progress of every nation, and ours has been the enduring engine of our pursuit of development.”

In his initial address, George Akume, the Secretary to the Government of the Federation, urged the committee to exert its utmost effort, emphasizing that the responsibility entrusted to it carries the hopes and aspirations of millions of Nigerian workers.

Akume highlighted that the establishment of the new panel fulfills the commitment made by the Tinubu administration to conduct a thorough review of the minimum wage for the average Nigerian worker.

The Chairman of the tripartite committee, Bukar Aji, reassured the President that the committee is committed to executing its assigned task with fairness and diligence.

“We shall, by God’s grace, carry out extensive consultations with key stakeholders to arrive at a new minimum wage that is fair, practical and implementable,” Aji, a former Head of Service of the Federation, said.

Meanwhile, Governor Mohammed Bago of Niger State, who is a member of the wage committee, told journalists that he foresaw no challenges in the next two months of the committee’s assignment.

“We don’t want to preempt the outcome of this meeting, but you need to understand that the sub-nationals also have challenges and that the Federal Government, in its own wisdom, has brought the sub-nationals into perspective and this discussion will be done together with the sub-national, so I’m not sure we’re going to foresee any challenge,” he said.

As for him, Humphrey Ngonadi, the Vice President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, contended that increasing the minimum wage would have little impact if the prices of essential commodities continued to rise.

“I thank God for this initiative that the government is taking at this particular place, but I’m still worried. We may remember some time long ago, there was the Udoji Award and that was the first time salaries of workers were increased and immediately after the increment, the commodities in the market ran up to meet.

“So while we increase the salary of the workers, let the government work on bringing down the prices of commodities in the market.

“If a worker is paid N1m as the minimum wage and a bag of rice is N900,000, the N1m still has no meaning. So what I think is while we are thinking of minimum wage, to hike the salary of the worker, the government, on its side, has to think of how that money will have value,” Ngonadi argued.

The 37-member tripartite Committee includes six Governors, cabinet Ministers, and representatives from organized labor and the private sector.

The governors are Bago of Niger State, representing the North Central; Bala Mohammed of Bauchi State, representing the North-East; Dikko Radda of Katsina State, representing the North-West; Charles Soludo of Anambra State, representing the South-East; Ademola Adeleke of Osun State, representing the South-West, and Otu Bassey of Cross River State, representing the South-South.

The ministers on the committee comprise the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; the Minister of Budget and Economic Planning, Atiku Bagudu; the Head of the Civil Service of the Federation, Dr. (Mrs) Yemi Esan, and the Minister of State for Labour and Employment, Nkeiruka Onyejeocha.