Nigerians are a unique set of people. We defy the laws of nature on several fronts; most notably the law that “whatever goes up must come down”. People climb to the peak of power and refuse to come down. The price of goods and services are arguably one directional-“up”. Suffice it to say we are a “progressive people”. The trend of things not coming down has in recent times led to the increased tempo/heat on the issue of minimum wage. Almost everyone has something to say about it. Despite the deafening level of the conversation on this topic on the front burner of the Nigerian socio-economic challenge, two salient points continue to echo from the two sides of the spectrum. First is “we want more!” while the other is “we cannot afford any more in the light of the current realities”. Before going any deep in this discussion, it is imperative for us to undertake some deep learning from the views and perspectives of some of our very own on twitter.
“Can’t settle for no minimum wage” @TrelleGotDamn (05:37 AM, 5/12/2017)
“States may not be able to pay new minimum wage” @Channelstv (6:12 PM, 04/12/2017)
“Attention is expensive to pay….and I can’t get off minimum wage…” @NanasiaMusic (3:02 PM, 02/12/2017)
“Don’t go into your job search with a minimum wage mindset” @larosa_shelton (6:42 PM, 04/12/2017).
“Mr. President approved the appointment of a 30 member tripartite National Minimum wage Committee @APCNigeria (4:15 PM, 24/11/2017)
“Stupidity. Increase salary for people adding zero value and inflation neutralizes it. And only govt will pay minimum wage. And private sector workers will suffer the inflation. This our country ehn…O su mi…” @deaolaadebanjo (7:47 PM, 25/11/2017)
“Which one is the best option, stabilizing the naira and having price control or increasing wages and allowing market forces to dictate” @TOUNGOS (8:31 PM, 24/11/2017)
“On minimum wage- Nigeria has a minimum wage of N18, 000 per month- or just under $2 a day. But just how low are Nigerian wages in comparison to the rest of the world?”@StearsBusiness (2:00PM, 02/12/2017)
“Minimum wage in Nigeria really needs to be addressed. Currently is N30, 000, isn’t it? That is criminal. We need to adopt a per hourly rate” @kckane (5:39 PM, 29/11/2017.)
“I agree that our minimum wage is piss poor but our work ethics … ‘piss poorer’. We need to look into that to even deserve the comparison you are making” @Temidayoaluko (10:40 PM, 29/11/2017.)
What a fantastic conversation. I literally got lost in that world of opinions and silence. So now let’s go just a little bit deep. For starters, what is minimum wage? What is the history? Why is it such a big issue? What is competing with it? What can solve this debacle?
According to the Merriam Webster dictionary, minimum wage is the lowest wage paid or permitted to be paid; specifically : a wage fixed by legal authority or by contract as the least that may be paid either to employed persons generally or to a particular category of employed persons. International Labour Organisation (ILO) defines it thus: “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract”. Mind you no one is talking about quality performance or productivity.
I really don’t know much about the origin of this boiling hot topic, but I sure know that history has some answers. The first minimum wage law was enacted in 1894 in New Zealand as an offshoot of the Industrial Conciliation Act which chartered District Conciliation Boards to adjudicate industrial labour feuds. Albeit, the main function of the boards was to expedite resolutions between employer associations and employee unions, the boards were also given the authority to revamp conditions of employment, including minimum wage standards if necessary and to stretch those conditions to other employees in the same industry who were not members of the association. New Zealand subsequently (in 1899 to be precise) set up a nationwide minimum wage which was fundamentally intended to prevent employers from enlisting children or apprentices with no remuneration. The United States joined the ship in 1938 and the rest is history. Almost every country in the world including Nigeria has adopted the payment model for its workforce.
Word is that there is a bill at the National Assembly which will increase the national minimum wage every five years. Will this really remove lots of Nigerians from poverty and place them in the middle class? There has been so much trending on numerous platforms on minimum wage in Nigeria and there was this particular one on ‘WhatsApp’ that caught my eye. It reads:
The minimum wage was the equitable means between the heartless march of capital for profits and the rights of powerless labor to earn enough to live a meaningful and comfortable life. This is the founding principle.
If the aim is to promote the rights of workers to live a meaningful and comfortable life, it therefore means that the minimum wage must by definition be based on an economic determination of what constitutes a comfortable life. In simple economic terms, the easiest matrix to use is the Retail Price Index (RPI) after deciding on its constituent parts and determining what goods and services are absolutely essential to our localized definition of a ‘comfortable life’.
Does such a life include bread, tomatoes and meat? Does it have regional bias to say replace meat with fish? Or does the fact we live in a vibrant nation full of upward mobile possibilities warrant everyone to alternate between fish and meat? Does it include access to clean water and electricity? A school within 2 miles?
To reflect further, do we need regional minimum wages to set aside the bustling metropolises from docile regional cities?
Furthermore, do we need a Standard of Living (SOL) sub index to categorize standards and then examine regional variations which eventually could inform developmental policy? The questions are endless, but the circumference of what it can achieve as a policy tool is easy to define and legislate upon.
We could go on and on refining these thoughts. But the bottom line is that:
The minimum wage is primarily a tool that will allow the government set a standard of quality of life. Without this objective and financing to sustain it in the long term (perhaps through a ‘Minimum Wage Endowment Fund’), it’s a totally meaningless exercise to try to define it. It’s almost trying to measure how much to climb to harvest a fruit but never really planning to climb the tree.
This was probably triggered by the appointment of a 30-member tripartite National Minimum Wage Committee for the negotiation of a new National Minimum Wage by Mr. President. The highlight of the inauguration speech was in the expression “….Accordingly, we should aim to go above the basic Social Protection Floor for all Nigerian workers based on the ability of each tier of Government to pay”. The propensity to create and redistribute wealth if there is any, is the only reason we should be having this conversation.
There is no doubt that there are wage inequalities but would it be fair for it to be equal considering the inequality in productivity and performance? I am not just asking, it is crucial because the world has long gone past this style of “covering the field”. A recent article by Maggie McGrath titled ‘Unions Are Dead? Why Competition Is Paying Off for America’s Best Workers’ published by Forbes on its official website on the 12th of December, 2017 shares my sentiment. It partly reads: “…..If competition now delivers what unions once did, it has also replaced government policy, or filled in where it’s lacking. The federal minimum wage hasn’t been increased since 2009, and at its current $7.25 an hour, it offers a path to poverty, with few avenues for advancement”. The operative phrase is “best workers”. What are the indices for measuring that? Performance and productivity, nothing more! Will an increment of basic salary from N18, 000 to N56, 000 make Nigerians richer? Will it increase our GDP? Will it make Nigerians more productive or just a part of the vicious circle?
Truly the cost of living is very high, but the remedy does not lie in increasing minimum wage but in optimizing performance and productivity. An avenue through which every worker becomes the determinant of his or her own minimum wage; through conscious adherence to processes, international best practices and standards, collaboration, integrity and contribution to the national bottom line. When we adopt this as our work culture, we will be on track in defying nature because our standard of living will only go up and never come down despite the waves in the international economy.
2 Comments Add yours
Thank you for this piece
Our present wage structure has s detrimental to growth, productivity and efficiency .
It’s creates a culture of entitlement rather productivity. This will continue to impact negatively on dignity of labour and career development within various sectors of the industry
A well researched and informative article. The truth has been shared here; a raise in minimum wage will not add any value to Nigeria’s GDP. Nigeria as a country needs to improve her productivity. We rank as one of the least productive countries across most areas.