by Drew Povey
The minimum wage should have been revised by now – but little progress seems to have been made. The Nigerian Labour Congress (NLC) and the Trades Union Congress (TUC) need to immediately lead a strong campaign to ensure that our demand for N66,000 now is realised as soon as possible. Five years ago, in December 2010, the NLC and TUC demanded N52, 200 as the minimum wage based on the then prevailing economic situation and indicators.
In early September, The President of the NLC, Ayuba Wabba, said, “when we negotiated the current N18, 000 minimum wage five years down the line the exchange rate of naira to dollar was around N140, but today the naira to dollar is over N200”. “The inflation rate over the past five years have been monumental and invariable it is clear that the purchasing power of the ordinary Nigeria worker has actually being reduced to nothing”, he added. However, he suggested that a formal demand would not be made to the Government for several months.
Some people have questioned whether the demand for N66,000 is realistic, but this figure is necessary to compensate workers for inflation over the last few years and and the recent to devaluation of naira. Price increases over the last five years have been huge and so we need a huge rise in the minimum wage to compensate. But also we need a large increase in minimum wage to start to reduce inequality within Nigeria and also across the world.
The research findings of the TUC indicate that the subsistence of an average worker requires a minimum wage of at least N66,000 a month. How can we expect workers to work all month and then receive a salary that is not enough for them and their families to live on?
According to the World Bank, the average income (per capita GDP) in Nigeria is now well over N50,000 a month ($3,000 a year). This means that the average income for a typical family of two adults and four children is now over N300,000 a month. Both the mother and the father would have to earn N150,000 a month to reach this figure. N66,000 is only 44% of this average figure and so actually it is quite modest.
The minimum wage also needs to increase to reduce the inequality between Africa and Europe. In Britain, the minimum wage is now £6.50 an hour – or the equivalent of around N350,000 a month or well over five times a Nigerian minimum wage of N66,000. Yet is Dangote is richer than anyone in Britain. The Nigerian rich are richer than than those in Britain – so why should the poor be poorer?
The African Development Banks says that the Nigerian economy, has seen, “robust growth of around 7% for the past decade”. This means that the economy is now nearly a third larger than it was in 2010. Then the when the National Assembly agreed the minimum wage should be N32,000 – so the equivalent now would be N42,000 to reflect economic growth. The Bank also says that, “robust growth over the past decade has been accompanied by increasing inequality and vulnerability”. We also need a large increase in the minimum wage to overcome these problems.
The Nigerian stock exchange increased in value by over 100% from mid-2012 to mid-2014. If one of the rich elite had invested a million naira in 2011, their investment would now be worth nearly 1.7million – a 70% increase. The NLC and TUC agreed to a demand for N52, 200 in 2011, a demand for N66,000 is not much more than 25% more.
People were rightly outraged earlier this year with the idea that each member of the National Assembly was to receive a ‘wardrobe’ allowance of N9million – a worker would have to work for more than 11 years on a wage of N66,000 a month to earn this much.
When President Buhari eventually made his wealth declaration public, his spokesperson said that this showed that he led, “an austere and Spartan lifestyle”. But he still had $150,000 cash in the bank. This is what a worker on N66,000 a month would earn in nearly 42 years.
At the end of September, Bobboi Bala Kaigama, TUC President rightly said, “The country is not broke. It is the administrators that are broke in terms of ideas.” We need a huge campaign for N66,000 now! To ensure that workers are not broke each month. Austerity is only necessary because of organised looting of our resources by the rich and corrupt elite – why should those on the minimum wage pay for this?