• Friday, June 21, 2024
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How many Nigerian workers will benefit from the new minimum wage?

How many Nigerian workers will benefit from the new minimum wage?

The battle over Nigeria’s minimum wage has reached a fever pitch. In a move that seems more symbolic than substantial, the federal government has raised its proposed minimum wage by a meagre ₦2,000, bringing the total to ₦62,000. This adjustment, while better than nothing, falls woefully short of addressing the severe economic hardships faced by Nigerian workers.

In stark contrast, the labour union has adjusted its initial demand from an ambitious ₦490,000 to a still unattainable ₦250,000. This significant reduction signals a willingness to negotiate, but it also highlights the vast chasm between what the workers need and what the government is willing to offer.

The government’s latest offer feels like a drop in the ocean, barely making a ripple in the turbulent waters of Nigeria’s economic woes. An inflation rate of 33.69 percent continues to erode purchasing power, and the cost of living skyrockets with food inflation at 40.53 percent, making the proposed $62,000 almost laughable. It’s a clear sign that the government is out of touch with the harsh realities faced by its citizens.

“Without formal employment protections and minimum wage guarantees, they endure precarious working conditions and unstable incomes.”

On the other hand, the labour union’s demand, while appearing steep, reflects the desperation and urgency of the workers’ plight. The union’s reduction to ₦250,000, although still high, underscores a dire need for a livable wage that can sustain families in the current economic climate.

From the ongoing drag, there is a possibility that both the federal government and the labour union will eventually reach a consensus over the prevailing wage rate, considering past negotiations that led to the current rate of ₦30,000.

In light of this, the pertinent question arises: How many Nigerians will benefit from the new minimum wage? This is a crucial inquiry that must be addressed as the nation watches the unfolding negotiations.

Data from Analysts Data Services Resources (ADSR) reveals a stark picture of the Nigerian workforce. Out of a total population of 229 million, 76 million Nigerians are workers. A staggering 82.9 percent of these workers, amounting to 63 million individuals, are employed in the informal sector without wages, either self-employed or working in family businesses.

Read also: Minimum Wage: BudgIT uncovers N132.2bn ‘frivolous’ 2024 budget allocation

Only 3.6 million workers, or 4.8 percent, are employed in the informal sector and receive wages. Additionally, 3.8 million Nigerians are unemployed, making up 5 percent of the workforce. Meanwhile, a mere 0.3 million workers, or 0.4 percent, are employed in the formal sector without wages, and only 5.3 million workers, or 6.9 percent, are employed in the formal sector and receive wages.

However, of the 5.3 million employed in the formal sector collecting wages, 1.8 million work in private organisations, 1.2 million work with the federal government and are paid from the Consolidated Revenue Fund (CRF), 0.3 million work with federal government-owned enterprises (GOEs) and non-CRF, 1.3 million work with state governments and agencies, and 0.7 million work with local government areas (LGAs) and local council development areas (LCDAs).

To address the question of how many Nigerians will benefit from the new minimum wage, it is clear from the breakdown of the Nigerian workforce that the primary beneficiaries will be the 1.5 million federal government workers, who represent 28.3 percent of the 5.3 million employed in the formal sector collecting wages.

Meanwhile, the remaining 71.7 percent, or 3.8 million workers, are subject to the financial capacity of the companies they work for or the state governments and agencies—a harsh reality.

Beyond this, the fight for better wages does not directly affect the 153 million non-workers, the 3.8 million unemployed, the 63 million working in the informal sector with no wage, the 0.3 million employed in the formal sector with no wage, and the 3.6 million working in the informal sector collecting wages.

For the 153 million non-workers and those employed in sectors not covered by the minimum wage increase, the economic outlook remains bleak. Inflation continues to erode whatever modest incomes they might have, and the lack of a safety net means many live on the brink of poverty. These individuals face rising costs for basic necessities without a corresponding increase in income to offset these expenses, worsening their financial struggles.

Additionally, those in the informal sector, who make up a substantial portion of the workforce, remain vulnerable. Without formal employment protections and minimum wage guarantees, they endure precarious working conditions and unstable incomes. This disparity underscores the need for comprehensive economic reforms that extend beyond mere wage adjustments to include robust social safety nets, access to affordable healthcare, and opportunities for formal employment.