June 18, 2011

GOVERNORS MUST IMPLEMENT NEW MINIMUM WAGE

The new legal minimum wage of N18000 of 2011 is based on the current revenue allocation formula, the capacity of the economy, the ability of both the private and public employers to pay as well as modest working (not necessary living!) conditions of a minimum wage earner. And the earlier the governors and private employers and federal government pay the better to avoid industrial sanctions by workers and the burden of arrears that accompany avoidable and criminal delays. The respected Chairman of the Nigeria Governors’ Forum and governor of Rivers State, Rt. Hon. Rotimi Amaechi got it completely wrong when he said the state governors are not in a position to immediately implement the 18,000.00 minimum wage unless there is a new revenue allocation formula. If there is a new revenue allocation formula tomorrow, there is bound to be a new minimum wage higher than the current N18,000.00.

The point cannot be overstated; the new N18,000.00 minimum wage is a product of painstaking 2 year negotiation and consultation by the Tripartite Committee on the National Minimum Wage. Critical stakeholders that negotiated the new rate included State Governments, Federal Capital Territory Administration, Organized Private Sector (OPS), Small and Medium Enterprises (SMEs) as well as informed opinions drawn from key institutions and professional bodies like CBN, Nigeria Institute of Social and Economic Research, NISER, National Productivity Center, (NPC) National Planning Commission, Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) as well as Nigeria Association of Small and Medium Enterprises (NASME). All inclusive negotiation Committee negotiated and arrived at an upward review of national minimum wage from N5,000 and N7,500 (state and Federal levels respectively) to N18000, a compromised rate from the N52,200 demanded for by Nigeria Labour Congress for a Nigerian minimum earner. The N18,000.00 minimum wage is dependent on the current revenue allocation formula among other economic and social fundamental macro factors like the oil revenue, cost of working and living, non –oil sector performance, labour productivity and general level of poverty.

Governors must know that national minimum wage is the lowest legally permissible level of wage payable in the specified period by their employers (federal and state governments inclusive) for their social satisfaction and the need of their families. It is the minimum social floor below which no worker should fall. A country with trillion of Naira budgets in the past decades should with lorry loads of rhetoric about poverty alleviation feel ashamed debating payment of legally permissible pay of N18000 (less than $200). As far back as 1982 Nigerian workers earned as much as $200 dollars per month, which means that with all the huge revenues accruable to all tiers of governments, Nigerian workers are still poorer than they were three decades ago.

Minimum wage is a national economic and social heritage that no serious governor should discountenance. Indeed in a real democracy. Governors should be outdoing each other to campaign with improved minimum wage as was the case during the active contestation of governance ideas between NPN led by Alhaji Shehu Shagari and UPN during the second Republic led by Chief Obafemi Awolowo. There was a Minimum wage in the Western region in 1940s, national minimum wage in 1981, 1991 and 2000. They were all implemented by all employers that included the State governors. 2011 minimum wage should therefore not be subjected to another subterfuge or delay. Governors should initiate creative ideas to alleviate poverty and grow the economy rather than offering excuses for lack of governance.

Governors should urgently respect the rule of law and immediately implement the new minimum wage as signed by President Jonathan failing which they must face industrial crisis in the States. Happily Governors of Edo and Lagos have put machinery in place to pay, others should emulate them. No state governor will command the support of workers without explicit commitment to the new minimum wage.

Issa Aremu mni.
GENERAL SECRETARY/VICE PRESIDENT NLC