The Nigeria Labour Congress and the Trade Union Congress have outlined requirements for the proposed review of the national minimum wage, stating that the ongoing rise in inflation and the naira’s depreciation must be examined before the Federal Government’s salary increase announcement could be taken into consideration.
The organized labour noted that practically all consumer goods in Nigeria were becoming more expensive and emphasized that, if this trend continued, any additional money provided to the minimum wage might not be enough to cover workers’ expectations.
The NLC and TUC spoke against the backdrop of Chris Ngige, Minister of Labour and Employment, announcing that the Federal Government would shortly announce salary increases for civil workers and public officials due to the constant rise in the cost of consumer products.
According to the Consumer Price Index data released this month by the National Bureau of Statistics, Nigeria’s headline inflation has continued to grow this year, reaching a new high of 21.47% in November 2022 from 21.09% in October 2022, The PUNCH reported.
It also noted that this rate was the highest in around 17 years.
According to the NBS, the reason for the increase year-on-year was the increase in the cost of importation due to the persistent currency depreciation and a general increase in the cost of production, including an increase in energy cost.
The food inflation rate also increased to 24.13 per cent on a year-on-year basis, a 6.92 per cent higher compared to 17.21 per cent recorded in November 2021.
The World Bank recently said Nigeria might have one of the highest inflation rates globally in 2022, with increasing prices diminishing the welfare of Nigerian households.
Speaking at the Presidential Villa on Tuesday, the minister explained that a Presidential Committee on Salaries is currently reviewing salaries with a plan to announce its decision in early 2023.
But reacting to the planned salary review on Wednesday, the Deputy President, NLC, Joe Ajaero, said that the government, employers and labour unions must meet to review the minimum wage before any hike could be considered.
He said, “As we speak now, the price of kerosene, cooking gas, a litre of fuel; any of these items, multiply their cost by 30 days; it is more than the current N30,000 minimum wage.
“So, it is not necessarily the amount of money or quantum you are going to put that will solve our problem. You have to check the rate at which these items are going up, or else within even a day or two, the money will be used up.”
Asked to state what workers expect in terms of the review and the possible minimum wage that the government should consider, Ajaero replied, “I don’t think we should put the cart before the horse.
“But if they have used the word ‘review’, it then means the tripartite body will meet and factor in all the issues, whether it is based on the cost of living, as we will also look at the inflationary trend and the devaluation of the currency.
“All these things must be brought to the table in the course of the review. So, one can’t just give figures on the amount at this point in time. If it is a review, I think it will be a comprehensive review in line with the prevailing situation.”
Providing explanation on what he meant by the tripartite body, Ajaero said, “It includes the government, labour and employers, which are the parties that constitute the legs in the industrial relation tripod. They should be present when this issue is being discussed.”
When pushed further to project an amount that should be considerable at the moment, bearing in mind the current economic situation in Nigeria, the NLC deputy president insisted that it would not be possible to give a figure because of the country’s galloping inflation.
He said, “The inflationary trend is not constant and that is why it becomes difficult to project at any point in time. From the level of inflation and the way it eroded the current minimum wage, it will be difficult to project in percentages what should be good for the review.
“This is because when you multiply the cost of all consumables by 30 days, what you get seems to be higher than the current minimum wage, for instance, the price of a loaf of bread multiplied by 30 days, is more than the minimum wage.
“If you don’t check inflation by making it stay at a nearly constant rate, if it continues to go up, there’s no amount of increase in naira terms that will assuage the level of devaluation of the currency and the take-home pay of the workers.”
Ajaero added, “Another thing is that if the naira continues to depreciate in value on a daily basis, it will be tough to project an amount, unless we are going to look at a situation where the minimum wage of workers would be self-adjusted such that if the inflation rate rises at a particular percentage, the minimum wage will adjust too based on that percentage.”
NLC list conditions
Determining the new wage, Ajaero said, would be based on different indices such as the cost of living, inflation rate, devaluation rate and others.
He stated, “It is not going to be a straight jacket issue. If the Federal Government says there will be a review in the new year, and that review will involve a tripartite session- Labour, government and employers. And since they equally said it will be determined by the increasing cost of living; then, some factors will be considered, which is the cost of living index, inflation rate, devaluation rate and others in determining the new wage.’’
“That is why we can’t project a particular amount, but if you check all the indices that constitute a living index, they are higher than even the current minimum wage of N30,000.
“Take for instance, a loaf of bread is now N1,000, and in 30 days that will be N30,000. So, all of these will be brought to the table. If you look at even transportation, kerosene, diesel, petrol and cooking gas; and other expenditures are more than N30,000 minimum wage”, he explained.
He spoke on the need to keep inflation constant, saying, “There will be a need to keep inflation constant, not just minimum wage. Because if you don’t keep inflation constant, no matter the amount you approve today, it will be eroded the following day.
“So, if it is a review, then, the federal government has to bring all these factors to the table. But if it is an award, then, it is a different thing entirely. We will know how to make comments when we get clarification from them.”
TUC reacts
Speaking with our correspondent in Abuja, the TUC Secretary-General, Nuhu Toro, stressed the need for the government to address the devaluation of the naira and rising inflation, while also reiterating the imperative of regulating the cost of goods and services.
He stated, “We can’t just talk about an increase in minimum wage; there is a need to regulate cost of goods and services and that is the only way Nigerian workers can have value for the little wages they receive.
“Remember, the workers toiled to create this wealth, so it is not right that the worker that created the wealth is left hungry. Take for instance, the current N30,000 minimum wage which presently cannot do anything.
“As a worker living in Abuja, if you take N1,000 and you live in Mararaba, you transport yourself to the office with N500 and when you are going back home from the office, you also pay N500; transportation would take everything. That N1,000 per day multiplied by 30 means N30,000 is gone.
“What happens to the feeding, health, and school fees of children? Automatically, there is nothing which means workers only work to earn transport fare. That is not fair. It is inhuman. The TUC will not sit down and fold their hands. We will speak out.”
Proposing a realistic minimum wage, Toro said, “Without being sarcastic, even if you introduce N60,000 as minimum wage, which is times two of what is being paid now, it does not align with the high cost of living, another index value.’’