Organised Labour Movement celebrated this year’s (2018) May-Day with the usual processions and fiery speeches from their Leaders in various State Capitals, including Abuja.
Labour’s focal present demand, is for a steep upward reviewed of the present N18,000 Minimum Wage to N56,000/month. On their part, however, according to FCT NLC Chairman, Lawrence Amechi, the Nigerian Labour Congress, “has decided that our demand is to be paid N66,500 as the new Minimum Wage, no more no less;” “the present N18,000 is death wage.”
Similarly, the Union of Pensioners have also demanded a minimum pension of N40,000/month instead of N3,240; while FCT Minister, Mohammed Bello, also agreed that “indeed, N18,000 which translates to N600/day, clearly puts the Nigerian workers amongst the lowest paid in the world.”
However, if most States cannot fund their present salary obligations, it would be clearly overoptimistic to expect that Labour’s demand will be fully met.
The title “Workers’ Welfare: Has Labour Lost the Plot?” was first published on 20/10/2014; a summary of that paper follows, hereafter, please read on.
“Labour Unions have the prime objective of enhancing and protecting the social and economic welfare of the working class, who invariably constitute, by far, the majority of the population.”
“Thus, where Labour Unions lack focus, knowledge and unity, the working class maybe left with the short end of the stick by the oligarchs and entrepreneurial class who control the factors of wealth creation in any country.”
“Conversely, Labour Unions which are knowledge driven, focused and united would have the capacity to protect workers’ right and compel equity in resource allocation and they may also wield significant political power in a nation’s administration; for example, the United Kingdom’s alternate government, the Labour party is a fine example of the strength of Organised Labour.”
“Trade Unions were also a critical force in the agitation for our nation’s independence from British colonial rule. Regrettably, with the later advent of military dictatorship, Labour was deliberately fractionalised and compromised, to become a mere shadow without its former awesome authority; indeed, since the failed campaign for the validation of 1993 elections, with the capture and incarceration, without trial, of NUPENG Secretary General, Frank Kokori, sadly, Organised Labour now occasionally, finds its voice on issues primarily relating to minimum wage levels and the sustenance of the disenabling economic strategy of subsidising fuel prices with billions of dollars annually.”
“Regrettably, Labour has inexplicably become mere spectators of unbridled treasury looting, and impunity in public administration.”
“Nonetheless, the question is how successful is Organised Labour, in its pursuit of realistic minimum wages and the sustenance of fuel subsidy. The May-Day speeches of Labour Leaders on Friday, 1st May 2009, for example, were strident on the demand for a reasonable minimum wage. Consequently, the Unions demanded that existing minimum wage of N7,500 ($50) be increased to N50,000 ($333)/month. In practice, a demand for almost 600 percent wage increase at a go, would be unusual in better managed economies, as any agreed minimum wage would generally recognise the adverse impact on inflation and the purchasing power of all income earners.”
“In contrast, despite an abiding annual inflation average of over 6 percent, the N7,500 minimum wage subsisted for over 10 years, with the consequent loss of over 60 percent of its purchasing power. Expectedly, workers became, painfully, much poorer before a higher minimum wage-level of N18,000 was adopted later in 2010. Similarly, with average annual inflation rates of over 8 percent since then, the current minimum wage has also lost over 40 percent of its purchasing value; consequently, despite the systemic bountiful Naira liquidity surplus and regularly declared, bountiful foreign exchange ‘surplus’ in the National Treasury, the lowest paid workers, who constitute the majority have simultaneously become increasingly more impoverished.”
“The plight of workers would obviously be much worse in states which are unable to pay the N18,000 new minimum wage or where government and its agencies, already sadly owe several months salary arrears; regrettably, there is no overt evidence of Organised Labour’s unyielding robust intervention to save the ordinary worker in such instances.”
“However, Labour and indeed those Nigerians with a conscience would agree that N50,000 ($400) is probably more appropriate as minimum wage, especially, with the severe infrastructural deprivations in our social and economic environment, where a rented room in a ‘face me I face you’ apartment may cost as much as N10,000/month. Nonetheless, if some states are presently incapable of paying N18,000, how does one expect them to pay N50,000; besides, with around 8 percent annual inflation rate presently, it is unavoidable that over 40 percent of a N50,000 minimum wage would also be lost to inflation within 5 years if there is no annual upward wage review!”
“Instructively, the Udoji Salary Review in the mid seventies should have taught Labour that such ‘benevolent’ spikes in wage increases will rapidly also drive higher rates of inflation. So if nominal wage increases is not the best answer, how then can Labour defend the existing purchasing power of its members’ income, if it is considered inappropriate to insistently advocate for significant wage increments to bridge the widening gap in income of the working class?”
“Indeed, if huge quantum increases could potentially, ultimately make the wage earner and the economy worse off, then it is imperative that we consider the relevance of nominally less or indeed relatively static nominal income, actually buying more without fuelling inflation; for example, if the N18,000 current minimum wage commands the purchasing value of about $110 at an exchange rate of N160=$1, the same wage rate would command the purchasing value of $220 if Naira rate is N80=$1.”
“Consequently, the stronger and more stable the Naira, the more enduring, and salutary would also be the purchasing power of the present ‘paltry’ minimum wage, for the average worker. The question therefore, is how can we improve the exchange rate and protect the Naira’s purchasing power? It is inappropriate to advocate that a benign exchange rate be adopted by fiat; all that is infact, required, is for the Naira to be given a fair chance to determine its own level without the persistent regular counterproductive interventions by Central Bank, when it continuously floods the market with fresh Naira values, when it knowingly substitutes fresh Naira values for dollar allocations, to instigate an embarrassing Naira market surplus against tightly rationed dollar supplies auctioned by the Apex Bank. But, in reality, are Union leaders sincerely interested in such enduring solutions to the issues of low wages, inflation and workers’ welfare? The answer to this question is out there in the wind!”
“Instructively, a Naira exchange rate of N80=$1, for example, will immediately abolish any further outlay on wasteful fuel subsidies, so that such erstwhile frittered funds could be wisely deployed to remediate our infrastructural deficit, so that the masses will enjoy better facilities for education, health, transportation, nutrition, etc.”
“Indeed, Labour leaders are aware that the economic contradictions, that impoverish our people are instigated, ironically, by the unyielding burden of systemic surplus Naira, and the simultaneous heavy increase in government debt accumulation.
Curiously, despite an alleged scarcity of loanable funds to grow our economy, Labour remained mute even when the immediate past CBN Governor, Lamido Sanusi, wilfully revealed government’s continuous folly in placing its deposits at zero percent with banks, only to return thereafter to borrow from the same banks and pay double digit interest rates for funds which the Apex Bank actually borrows and intends to keep as idle funds. Not even Labour, the Peoples’ watchdog has wondered how long such frivolity had existed, and why it is still sustained, or indeed, how many trillions of public money had been so blatantly misapplied in the face of deepening poverty nationwide?”
Save the Naira, Save Nigerians!!