WILL NIGERIA GET A LIVING WAGE IN APRIL?

A fundamental question begging for answer as we await the unveiling of the New National Minimum wage is whether the new minimum wage will qualify as a living wage? (breathing wage).?

?For the purpose of this article, a living wage as contemplated by the International Labour Organization (ILO) is the wage level that is necessary to afford a decent standard of living for workers and their families, taking into account the country circumstances and calculated for the work performed during the normal hours of work.

The above indicates that essence of a living wage is promote a decent standard of living for workers and their dependents. This plays a vital role in combating the menace of poverty and advancing social justice. it aligns with the parameters to be taken into consideration in determining the level of minimum wages as provided by Article 3 of ILO Convention on Minimum Wage Fixing (Convention 131, 1970). Despite the fact that Nigeria is yet to ratify this convention, there are oral commitment to the fact that elements for fixing the minimum wage will be considered by the 37-member Tripartite Committee set up to come up with a new national minimum wage by the end of March, 2024.

It is pertinent to state that the vital elements to be considered according to the convention is the needs of workers and their families, taking into account the general level of wages in the country, the cost of living, social security benefits, and the relative living standards of other social groups and secondly the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment.

The new national minimum wage is expected to emerge as one of the positive reactions of the government to the rising cost of living, especially in terms of food inflation as it is admitted that the current N30,000 Minimum Wage is far below a living wage for an average Nigerian worker. The Latest data released by the National Bureau of Statistics (NBS) showed that inflation had crossed the 30 per cent mark to 31.7 per cent compared to 29.9 per cent which it was in January this year. In the case of food, the burden continues as the inflation rate rose to 37.92 per cent in February 2024. This is an official report depicting the harsh economic conditions aggravating the menace of systemic poverty in Nigeria.

The Federal Government and a handful of subnational governments have provided relief in the form of additional stipends, reduction of onsite working hours, sharing of food palliatives etc. to address the growing economic concern. Despite being an unsustainable effort, the Federal Government has maintained that these measures will be in place pending the unveiling and implementation of the new national minimum wage. The foregoing suggests that the new National Minimum wage will partially address the current economic realities and countervail the effect of the current economic hardship.

?In the words of Mr Idris Mohammed, the Minister of Information and National Orientation-

Certainly, there is a new regime that will come in on April 1, 2024. That is why these palliatives were targeted so that would cushion the economic hardship before then. In our negotiation with Labour, we said that the wage issue was not something one could just fix. A Committee that will also involve Labour itself will work on it.

The above commitment by the federal government to implement the national minimum wage is beyond a response to the current economic hardship, it is a statutory obligation as Section 3(4) of the National Minimum Wage Act, 2019 provides that the Minimum Wage shall expire after 5 years and shall be reviewed in line with the provisions of the Act. ?The time is ripe and the situation is demanding a minimum wage that aligns with the current economic realities and revive a decent standard of living especially among Nigerian workers. ?

?Actors in the Labour sector have reacted to the situation as one of the members of the Tripartite Committee and The President of the Nigerian Labour Congress?, Comrade Joe Ajaero, noted that the Nigerian Labour Congress may demand N1 million as the new minimum wage for government workers citing the Nigeria’s sky-high inflation as a compeling force. In his words;

“This N1 million may be relevant if the value of the Nigerian (naira) continues to depreciate; if the inflation continues unchecked because the demand of labour is equally dependent on what is happening in the society,”

This demand may seem like an impossible figure but, the question is if 1, 000, 000.00 will offer a decent standard of living to a Nigerian worker considering the worsening economic situation in Nigeria?

Assuming the Federal Government declares N150, 000 as the new minimum wage and the cost of living keeps skyrocketing - will N150, 000 Minimum Wage qualify as a Living wage??

Whatever the new minimum wage will be, there are concurrent steps the government must take to ensure the due implementation and effectiveness across the country. It is essential for the government, policymakers, and other stakeholders in Nigeria to work together to address the root causes of inflation and the high cost of living, as these issues can have far-reaching implications on the economy, social stability, and the well-being of the population. Positive result in addressing the issue of inflation will also improve macroeconomic stability and the standard of living for its citizens.

?The lingering Implementation Challenge.

Another pertinent issue is the Implementation of the Minimum wage across Nigeria. This implementation challenge is divided into vertical and horizontal. Both the Federal government and sub national government are culpable of the vertical implementation challenge as the implementation of the current minimum wage has not been fully adjusted to cover all cadre of government employees. Every Worker irrespective of their cadre is entitled to benefit from the new minimum wage through the accurate adjustment of the entitled wage.

The horizontal challenge is the surface implementation of the new minimum wage. Here is a situation where the new minimum wage is partially implemented by the Federal government, the extent of implementation at the state level is not encouraging. One thing is to have a new minimum wage another thing is to ensure the compliance across the country by all employers. The compliance scorecard will definitely determine the effectiveness of new minimum wage in Nigeria. It is the case that there are many states yet to comply with the current minimum wage of N30,000 which came to force on the 18th April, 2019. About 5 years ago. The Implementation of the Minimum Wage at the state level has been low and enforcement difficult to monitor as some states allege the lack of capacity to pay. It is important to stress the fact that governors are well represented at the Tripartite Committee vested with the sole task of coming up with an acceptable figure. The Ministry of Labour and Employment should be more proactive in the monitoring implementation and enforcement of the new wage across all states in Nigeria as required by the Act. Where public employers fail to pay the National Minimum Wage as required by the law, the private and informal sector of the economy gets a wrong signal on this legal and moral obligation. This deprives a vast majority of Nigerian workers of the right to a decent standard of living. This further aggravates the current state of poverty, squalor and underdevelopment.

On a final note, I looking forward to the new minimum wage regime come April 2024, I hope it will happen timely as required by the law.

Do you think the New Minimum Wage be a Living Wage?