EDITORIAL: Once Again On The Minimum Wage

EDITORIAL: Once Again On The Minimum Wage
  • PublishedJuly 5, 2024

FORMER Lagos State governor Babatunde Fashola has provided startling clarity by making a distinction between minimum wage and salary emoluments. This is vital in a nonindustrial economic structure and should be factored into the debate. Nevertheless, the discourse rages on. 

An alarming input came on board this week with the screamer headline – “Osun, Oyo, and Benue have been identified as some of the states that have the least ability to pay and finance a new minimum wage. “This was revealed in a report by a research firm, Analysts Data Services and Resources (ADSR).”

We are not going to interrogate the methodology used in the report. However, we believe that the Osun State can pay and there is a strategic imperative for the state to do so. Currently, Osun makes circa 20 billion Naira in IGR annually and can make more even as the federal allocation continues to increase.

In the approved 2024 budget, statutory federal allocations to the coffers of the state governments will be 69 percent higher than that of 2023. In the N5.54tn FAAC projection for the year running, Osun is expected to get a whopping N99.09bn. This means the state will have more resources to pay its workers. 

To expand its revenue base, Osun must transit to an agro-industrial-led transformation and sustainability. Governor Ademola Adeleke has made a path-breaking input by waving all the right-of-way fees on fibre optics. This is to be applauded for the state cannot encourage studying skills, in a low-wage ecosystem that is inherently uncompetitive.

Paying the new minimum wage will sustain this trend by increasing the purchasing power parity and raising disposable income which as the government led by Chief Obafemi Awolowo in the fifties showed as a stimulus for jobs creating long-term investments. We are leaving aside here the perilous self-serving “consequential adjustment “ mendacity, however, there is a compelling economic logic in a positive direction for Osun State to muster the will to pay the new minimum wage.

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