Organised Private Sector (OPS) says a comprehensive restructuring of Nigeria’s public services – local to federal level – must precede any new national minimum wage review.
This, according to the OPS, is imperative to breathe life into a sector in dire need of efficiency, productivity and quality service delivery.
Larry Ettah, president, Nigeria Employers’ Consultative Association (NECA), who advanced the position of the OPS, told BusinessDay that while the prevailing economic situation, particularly, the rate of inflation had necessitated wage increase, such review should not be a routine, but an exercise targeted at encouraging productivity, efficiency and repositioning the public sector for service delivery.
Organised labour in 2016 proposed a new minimum wage of N56,000 to the Federal Government, hinging the need for it on high costs of living and the need to keep to the provision of the National Minimum Wage Act signed by former President Goodluck Jonathan, which agrees for a review every five years.
“The logic behind the minimum wage is to ensure that no worker earns below what can sustain him for a period of 30 days. You also know that when we negotiated the N18,000 minimum wage, the value in terms of exchange rate was almost at $110 to the naira.
“Today, it has been reduced to virtually nothing. He further argued that the minimum wage needed to be implemented if corruption is to be adequately addressed,” Ayuba Wabba, president, Nigeria Labour Congress (NLC), said.
Speaking further, Wabba said, “Without taking proper care of workers, it is very difficult to tackle corruption. That is why there is a process in place and we are going to dialogue around that process. That is why collective bargaining is important. Remember that former President Barrack Obama increased the US minimum wage when the US economy was in a recession.
“His understanding was that people need to be empowered to have purchasing power. If manufacturers are producing and nobody is buying, the economy will be at a standstill because people don’t have the purchasing power. And that is the situation we are in now.”
According to Ettah, however, given the depreciation in the value of the naira as well as inflation currently at 18.6 percent, a strong case can be made for raising Nigeria’s minimum wage.
“However, we counsel that, such a step be preceded by a comprehensive review and restructuring of the public services of the federal, states and local governments.
“Given that such restructuring may not be expedient in this period of recession and rising unemployment, our recommendation is that a review of the minimum wage should be deferred until the economy has resumed strong growth and public sector finances have improved,” he said.
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