Minimum Wage: Economist Highlights Why N30,000 May Be A Tough Task
The new National Minimum Wage in Nigeria has become a big issue now, with the labour unions threatening to go on strike.
They are asking for at least 30,000 Naira as the new wage, but governors of Nigerian States, including the ones owning months of salary are proposing 22,500 Naira.
"We no go gree," the unions are singing, but an economist, Dr. Boniface Chizea, took a critical look at the demand in consonant with the situation on ground and then the need for a raise on the other hand.
"I think the first thing to say is that the minimum wage in the country is not what it should be, considering the cost of living and considering the fact that we want to fight corruption.
"The 18,000 Naira is not up to it when you factor inflation and other things. Workers generally are impoverished," he highlighted, as he began to treat the issues affecting the desired increment.
It is one thing to make a demand for a raise and then it is another for the state governors to pay the amount demanded for.
Dr. Chizea pointed out that some state governments have had difficulties paying the 18,000 Naira minimum wage and that a raise would increase the burden on states that have not reasonably improved Internally Generated Revenue.
"While we say that the 18,000 Naira is not enough, we must put things in context. So, you say to yourself, even the 18,000 Naira, have the state governments been able to pay it?
"It is on record that many states have not been able to pay salaries even at the time Nigeria slipped into recession.
"States were owing backlog of salaries. Where is the capacity to pay the new minimum wage?" he questioned.
"Cut Cost Of Governance"
Some civil servants, who spoke with Bounce News after governors proposed 22,500 Naira as the new Minimum Wage, said politicians should cut down on the largess of holding political offices, with the National Assembly fingered as an institution that should begin the process.
But the economist said it would not be an easy thing to shut a tap down and open another abruptly. The nation will grind to a halt, he believes.
"If you say let's now find money to inject, or you say there are lots of waste within the system and then corruption on the other hand, you cannot shut the tap overnight," he said.
On the concerns on lawmakers' salaries, Dr. Chizea insisted that the issue of the remuneration of members of the National Assembly could not be addressed overnight.
"If you want to cut their salaries overnight, this country will grind to a halt.
"It is something that should be done gradually and we should use the opportunity to decentralise.
"Minimum wage is not something that should be synchronised in the federation and that is part of the problems we have.
"We have a unitary system and we say we are practising a Federal System of Government," he highlighted.
According to the economist, it is not realistic to have a National Minimum Wage that will put states like Zamfara, Taraba on the same level with Lagos and Kano States.
"It is a complicated issue and those who are negotiating should consider these issues before reaching a decision.
"The 22,500 Naira proposal is an improvement on 18,000 Naira. It is a good thing that we have been able to say, let's try and increase it.
"Labour can consider the amount and pray that the states will be able to pay that sum," he stressed.
Another issue that the economist raised was that of productivity in the civil service and even in the manufacturing sector, which if not upped could trigger inflation that would swallow up the increment.
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"If there is no increase in productivity there could be inflation as a result of the increase.
"Going from 18,000 Naira to 22,500 Naira is a way of managing the inflation that could result after the increment.
"Going from 18,000 Naira to 30,000 Naira is a way of ballooning the inflation.
"The impact on goods and services could be accommodated a bit more when the increase is not much," he added.
While the economist highlights these issues surrounding the increment, labour unions are insisting that 30,000 Naira would be the least they would take.
Some civil servants have described the 4,500 Naira increment as preposterous, laughable and even horrible.
While some questioned the rational behind the decision of the governors who have not even been able to pay the 18,000 wage, others insisted that security votes and salaries of lawmakers in the nation should be reduced to accommodate the increase.
Even the Federal Government has rejected the proposal by the governors.
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