New minimum wage: Tinubu in knife-edge balancing act
Three days from today is May 1, 2024, a day that is designated globally as the International Workers Day, to commemorate the struggles by labour to earn a more respectable treatment by employers. For Nigeria, it has been a tradition for governments at various tiers to honour labour with designated policy measures that address conditions of work for workers. With this year not being an exception, the day also has an additional ring to its credit as a new national minimum wage is expected to be unveiled by President Bola Ahmed Tinubu. However, due to prevailing circumstances, the expectation in respect of the launch of new national wage is overshadowed by the paucity of consensus among the 37 – member tripartite committee set up by the Federal government in January 2024 on the project. In the likelihood of failure to resolve the wide discrepancies among the takes by the various stakeholders, the President may be disposed to-announce a figure that lacks the buy-in of the critical stakeholder as labour, and risk further unrest that may spell more harm than good for the country.
Signs of a significant rift in the various positions by members of the tripartite committee manifested even up to the concluding stages of their deliberations by the end of last week, with the prospects of the President presenting to the country, a Labour Day nationwide speech that is bereft of a widely accepted new national minimum wage. A pointer to that direction was the take by a member of the tripartite committee—Festus Osifo the President of the Trade Union Congress (TUC), as he lamented the inconclusive state of the deliberations of the committee and lack of common stand on the final wage.
The grouse of the TUC President derives from the wide discrepancy between the figure of N615,000.00 monthly minimum wage as proposed jointly by his organization along with the Nigerian Labour Congress (NLC), for the Nigerian worker, and the conservative ceiling of N150,000.00 which the Federal Government is believed to be contemplating. Hence the scenario of a deep discordance running between government and labour into the May Day dispensation, clearly disposes President Bola Tinubu as drawn into a knife edge balancing act, as he either tows the position of labour and plays to the gallery, or sticks to the conservative stand of government, with each option offering him outcomes that will pose significant challenges to governance, as each borders on the nation’s capacity to deliver.
The major concern here is that while labour may be expecting a mouthwatering offer of what the leadership refers to as a living wage, the President remains constrained to settle for a more conservative package which is a far cry from what the two fronts for labour - NLC and the TUC had canvassed in the public space. Considering that the President may be settling for a figure not exceeding N150,000.00, which is less than a quarter of the joint demand of N615,000.00 by both the NLC and TUC the question is whether labour will accept such a package or not. Where labour rejects such a package from the Tinubu administration which is widely at variance with its terms, then the country may be thrown into another round of social upheaval as labour kicks against it. In this regard, it needs to be appreciated that as unpalatable to the government as labour’s demands may be, such remains the outcome of widespread, nationwide deliberations by the workers movement, and cannot be wished away casually.
It therefore remains for the government to appreciate that the position of labour is not based on wishful thinking or whimsical tendencies, but on the realistic responses by Nigerian workers across the country, to the biting pangs of hardship occasioned by the historical failures of past administrations to address the workers’ plight, with the situation aggravated by the sudden withdrawal of fuel subsidy by President Bola Tinubu at his inauguration on May 29 2023. With the general increase in prices, most Nigerian workers are surviving on the proverbial ‘shoe strings’ budget, with hardly any capacity to procure even basic foodstuff and other essentials for themselves, families and dependents. Hence the proposal of N615,000.00 by the labour leadership, to replace the existing N30,000.00 which was amended in 2023 to N65,000 by President Bola Tinubu himself on coming to office.
Likewise, while a comparison of the proposal of N615,000.00 by labour with the existing N65,000.00 may seem outlandish as national minimum wages, such may be a poor reading of the situation, as the labour proposal tacitly qualifies as the price which the government needs to pay for industrial harmony in the country, especially in the context of the Renewed Hope Agenda of President Bola Tinubu.
Just as an aside too, a recent survey places the average take home pay in the formal sector of the Nigerian economy at N350,000.00. Such a situation largely justifies the need for the President to consider a new meeting point with labour beyond the conservative N150,000.00, even if not the N615,000.00 by the workers’ leadership.
In the final analysis what matters most is the capacity of the country to implement and sustain whatever national minimum wage is adopted. In that context therefore, the President’s offer of a new national minimum wage needs to be complemented with an agenda for accelerated, robust expansion of the country’s productivity, as there is no free lunch anywhere in the world.