Labour, Private Sector Clash Over New Minimum Wage Demands

• The president, Nigeria Labour Congress (NLC), Joe Ajaero argued that the new minimum wage aligns with current socioeconomic realities
• The financial derivatives company managing director, Bismarck Rewane, said the dollarization of the minimum wage makes it unachievable
• Despite the Labour Union's reduction of the minimum wage demand to N497,000, the Presidency on May 27 declared the demand unrealistic

Ikeja, Lagos—The president of the Nigeria Labour Congress (NLC), Joe Ajaero and the financial derivatives company managing director, Bismarck Rewane, have traded words over the organized labour’s minimum wage demand.

Legi.ng reports that the organized minimum wage has been reduced from N615,000 to N497,000.

Meanwhile, despite this reduction by the labour union, the presidency stated on Monday, May 27, that Labour's demand for a N497,000 minimum wage was unrealistic and urged Labour to be more serious in their demands

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Leadership reported the tripartite committee for the negotiation of national minimum wage will reconvene today, Tuesday, May 28, to continue negotiations with the expectation of reaching an agreement regarding new wages for workers.

However, these major stakeholders in Nigeria's economic sphere had a face-off during the 2024 annual Vanguard economic discourse, on Tuesday, May 28 in Lagos.

Current economic realities demand for new minimum wage

As reported by Vanguard, the financial derivatives company managing director argued that the minimum wage demanded by Labour was not feasible, while Ajaero maintained that the demand aligns with Nigeria's current socio-economic realities.

Delivering his remarks at the summit, Ajaero, highlighted that the prices of essential food items in the market and services, including the cost of transportation, electricity, and food, had all skyrocketed.

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He said:

"The cost-of-living index determines wages, so let’s use some benchmarks. Today, a bag of rice costs about N84,000. Ask people who refill their gas cylinders; it might cost them N16,000 or N17,000, totalling over N30,000 monthly. Consider a plate of 'Mama-put' (roadside food vendor) at N500 without meat.

When you add these up for a family of six, you get about N270,000 a month. There are many such expenses we can consider. Also, according to the United Nations, no human being should live on less than $2 per day."

Living wage, and minimum wage are different

Speaking further, Ajaero pointed out that if you consider president Tinubu’s commitment to providing Nigerians with a living wage, it’s important to recognize that a living wage is distinct from a minimum wage.

He said:

“A living wage allows you and your family to afford food at least until the end of the month. The severe devaluation of the naira shouldn't prevent us from feeding ourselves or commuting to and from work.

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“No worker, including those here today, can go to work and return home without spending at least N2,000 a day. That totals N60,000 a month. Consider these factors and decide if a worker earning N615,000 a month would have any money left to save."

Don't 'dollarise' the minimum wage, says Rewane

On his part, Mr. Rewane told the NLC president not to dollarise the minimum wage, adding that the federal government may be able to fend for its workers, but private sector who are employers of labour may be greatly affected.

He said:

“If you dollarize the minimum wage, you're essentially converting the income based on the inflation already factored into the exchange rate. If you use the dollar value, you must also account for U.S. inflation. You can't use the dollar value alongside Nigerian inflation because that equates to paying wages in dollars.

Secondly, the national minimum wage law impacts both the private and public sectors. It’s a policy, not an economic or public plan. The government’s contribution to the GDP is about 10 per cent.

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The private sector employers also have to pay the minimum wage, but they can only do so from the revenue they generate, which is challenging in the current economic climate. They want to avoid a situation leading to a recession."

Labour’s N497,000 demand unrealistic, Presidency

Legit. ng on Monday, May 27 reported that the federal government expressed unreadiness to approve the N497,000 minimum wage demanded by organised labour, describing it as unrealistic.

Speaking on the development, the special adviser to the president on information and strategy, Bayo Onanuga, noted that the governments both at the federal and state have a bloated workforce.

Recall that the organised labour (NLC and the TUC) had made a demand of N615,000 minimum wage but later reduced the demand to N500,000 and then N497,000, while the government and the private sector in the last Tripartite meeting increased their offer to N57,000.

Source: Legit.ng