PERSPECTIVE: Realities And Perceptions In The National Minimum Wage Debate

PERSPECTIVE: Realities And Perceptions In The National Minimum Wage Debate
  • PublishedJune 21, 2024
  • By Prof. Mike Ikhariale

No one can deny the economic wisdom and, indeed, the moral justifications, for the establishment of an enforceable national minimum wage regime, more so, as employers of labour who are in business to make profit would naturally want to keep the operational costs of doing their businesses, including wages, down as low as possible. Since labour is a major factor in the nation’s production process, some have argued that its price ought therefore to be dictated more by the forces of demand and supply as against the present unproductive haggling by Labour and the arbitrary officialdom as exemplified by the evasive approach by government.

It should also be conceded that the current wage debate in the country is also a socio-political one, involving humans in a welfare-minded constitutional system. That is why responsible governments usually feel duty-bound to intervene in wage disputes especially where those governments have also diligently provided basic production-facilitating infrastructures for the industries which invariably constitute some forms of subsidies; it thus creates the requisite locus standi for the State to authoritatively intervene in such disputes because whoever “pays the piper dictates the tune.”

In other words, while it is true that market forces ought to dictate the true selling price of any commodity, including wages, modern progressive governments have however found it within their developmental prerogative to intervene in industrial schisms because, by providing large-scale infrastructural support for the industries, government is making businesses to be more efficient and productive than they would ordinarily have been if they were to be engaged in their individual provision of electricity, water, roads, security and other consequential items without which the cost of doing business would be unnecessarily too high for their profitability and survival.

Unfortunately, the Nigerian government is unable to fulfil any of these its constitutional and developmental obligations which then questions it moral and circumstantial rights to want to intervene in setting a credible minimum wage regime for the economy. There is also the larger problem of an all-pervading unproductive work ethics in the country, where the workers taking a clue from the political class, now believe that they can actually become rich by doing nothing economically productive.

The Nigeria of today is not as productive as that of the sixties and seventies as we no longer farm our soil for rice, yam, groundnut, produce, rubber, palm oil, cocoa and groundnut for our own consumption and the excess exported for foreign exchange. Today, we have run out of food and the people are hungry while the vast fertile land of the country is lying fallow. There is the other explanation that even if the people are ready to work their farmlands, the untamed insecurity in the country has made it impossible for them to do so which also is an indictment of the State and its government functionaries whose primary duty is the security of the people.

READ: Minimum Wage: Disregard Report Of Plot To Seize States, LGs Funds – Senate

Unless we kid ourselves, the average government employee and those in semi-official sectors of the economy hardly do much to justify their pay, as little as it is already. The workers, taking a cue from their political overlords who see government as a cash cow to be milked to death, have also learnt never “to kill themselves for government work” because as far as they are concerned, it is always the case of “Monkey de work, Baboon de chop.”

Demand for minimum wage has, in terms of timing and tone, been overtly politicized with very little consideration for the stark economic imperatives that should guide the negotiating parties in articulating and advancing their positions. Especially on the part of organised labour, it has become a periodic opportunity for photo-ops, primitive haggling as well as arm-twisting the lame duck governments, especially those facing elections.

Rather than focus on the economic indices that are relevant to the minimum wage calculus, attention is now focused, and necessarily too, on the humongous emoluments, perquisites and largesse which those in government take home. They see the amount of money being wasted on legislators, the imported SUVs gulping billions of naira as well as the embarrassing opulence of the Executive branch, their elongated vehicular convoys and other hedonistic pastime to arrive at the minimum wage demand of about N600,000 a month, their “starting point” of the negotiations.

The government has since lost its moral energy to negotiate either “the affordable” and “sustainable minimum wage” with Labour when it is well known that it has increased its own emoluments and other bogus perquisites in spite of the near bankruptcy of the nation’s treasury. A more empathic and responsible government would have taken the workable route of starting off with a remarkable reduction in their own over-bloated self-rewarding salaries, emoluments and stupendous allowances by a minimum of 25% and then proceed to increase workers’ wages by the same percentage in “recognition of the hardship in the land”. Such a populist but considerate action would have taken the sail out of the union’s outlandish demands.

Nearby in Burkina Faso, a young coupist named Traore has turned himself into a Sankara wannabe hero for daring to forgo the usual luxuries of his office and instead decided to taste the same tough living situation of his people by forsaking the inherent hedonism ebbed in post-colonial governance in most of Africa. Tinubu still has a lot to learn in that regard. A leader must read the mood of his people and adjust his lifestyle accordingly.

Nigerians would have long embraced President Tinubu and his Renewed Hope Agenda if they had seen him rejecting those embarrassing perquisites of power, the opulence of the royals and the wasteful investments in purely hedonistic projects like the new Vice-president’s mansion, reduce the interminable official convoys and kill the talks about acquiring more presidential jets on top of the multibillion-naira yacht already lying idle somewhere, all at a time when the country is reeling in abject poverty, misery and hunger. It does not make sense that a country that is borrowing from left and right and from all across the globe would be exhibiting opulence by her leaders. It is provocative and highlights crass insensitivity.


A National Minimum Wage and ‘True Federalism’

It is funny when you hear Nigerians loudly calling for “true federalism” in the political front but staunchly insist on unitary approaches in economic matters. What is the economic rationale for expecting the various governments in the federation to pay the same level of wages and other emoluments, knowing their yawning differences in revenue generating capacities?

A national minimum wage does not say that all the states within the federation must stick to that figure. Such would be an economic assault on federalism. Each state should pay its workers, from the Governor down to the messenger, what is within its economic capability but not less than the national minimum wage. That is why the minimum wage in urban New York is different from those in rural Arkansas or Alabama. Why should a governor in Zamfara State expect to be rewarded and pampered like that of Lagos State when their respective economies are dissimilar?

Rather than placing our economic hope solely on a valueless minimum wage that does not take workers home, we should instead be developing the right entrepreneurial mentality by looking at ways and means to boost our individual and collective productivity level in order to enhance our overall economic worth. We are hungry because we have not planted enough; we are poor because we have not produced enough. A government that can solve this simple productivity question is one that would earn the respect of the people whatever the nation minimum wage is because money is merely a medium of exchange and its value resides in what exactly it can buy.

The opinions expressed in this publication are those of the author. They do not represent the opinions or views of OSUN DEFENDER.

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