Navigating the stalemate in new minimum wage negotiations

Navigating the stalemate in new minimum wage negotiations
By: Business Posted On: June 09, 2024 View: 4

By Uzoma Isiakpu

Due to the dynamic nature of society and the needs of the time, employers of labour in both the public and private sectors of the economy engage in dialogue on a regular basis to devise an acceptable wage for the workforce.

The first National Minimum Wage Law was passed in Nigeria in 1981, thanks to the efforts of the late Hassan Sunmonu-led Nigeria Labour Congress (NLC).

Former President Shehu Shagari signed the Act in September 1981, which set the monthly salary for workers at N125:00. In 2000, the national minimum wage was raised to N5,500.00.

From 2000 to 2011, the minimum wage was increased to N7,500.00.

Former President Goodluck Jonathan signed a new Minimum Wage Law in 2011, raising workers’ monthly pay to N18,000.00. The new wage was applied to both public and private employers with a workforce of approximately 50 people.

In the autumn of 2018, organised labour advocated for a wage increase to N30,000.00. During the negotiations, the Federal Government proposed N24,000.00, while the state governors agreed to N20,000.00.

However, in January 2019, the National Council of State approved the N27,000.00 minimum wage. The all-powerful Nigeria Governor Forum reduced it to N22,500.00.

The leadership of the Nigeria Labour Congress (NLC) maintained its previous demand of N30,000:00. The Federal Government agreed to meet the Union’s demand.

This resulted in the passage of the New National Minimum Wage Act, which was signed into law by the immediate past President, Muhammadu Buhari in March 2019.

For the record, prior to the enactment of the first National Minimum Wage Act in 1981, the late Obafemi Awolowo, former Premier of the Western Region, had established a minimum wage of Five Pounds and Six Pence for workers in the region in 1959. The wage of five pounds and six pence was higher than that paid to federal employees at the time.

Since January 30, 2024, when Vice President Kashim Shettima inaugurated the 37-member Tripartite Committee comprising the Federal and State Governments, the Private Sector, and Organised Labour on behalf of President Bola Ahmed Tinubu, the committee has been delaying and has yet to propose a new minimum wage.

At the inauguration, Vice President Kashim Shettima urged the committee to reach a resolution and submit their reports as soon as possible to ensure the implementation of a new minimum wage. Unfortunately, the negotiation has been anything but quick.

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To say the least, the negotiation has been marked by deception, insensitivity, and the gravity of any delay.

To expedite the process, organised labour issued an ultimatum to the Federal Government on this year’s Workers Day, giving it until the end of May 2024 to develop an acceptable new minimum wage.

To expedite the negotiations, organised labour reduced their demand to N494,000.00 from the initial N615,000:00 and N497,000.00. The federal government increased her offer to N60,000.00 from N57,000.00.

The Federal Government’s offer of N60,000.00 was rejected by organised labour. They are also protesting the electricity tariff increase, which has yet to be reversed, as well as the categorization of consumers into bands, as demanded by Labour. All other things being equal, Labour’s leadership stated that these failures have compelled Nigerian workers to embark on an indefinite nationwide industrial action beginning Monday, June 3, 2024.

The Federal Government, through Minister of Information and National Orientation Mohammed Idris and his Labour and Employment counterpart Nkiruka Onyejiocha, has urged Labour to postpone action because their demand is unsustainable and could destabilise the country’s economy.

According to the Ministers, Labour’s demand will cost the federal government N9.5 trillion and negatively impact 200 million Nigerians.

Given the harsh economic realities that Nigerian workers face, how will the authorities navigate and break the deadlock? One sure way is to drastically reduce the emoluments of the executive and legislative branches.

When workers demand a pitiful N494,000.00 monthly salary, a Distinguished Senator of the Federal Republic earns a fantastic N29, 479,749.00 monthly. This intimidating pay applies to members of the House of Representatives, State Houses of Assembly, and the Presidency.

If the jumbo pay of this category of Nigerians is reduced slightly, the federal government will receive more than the N9.5 trillion required to pay the New National Minimum Wage demanded by Labour. There is an urgent need to end the current inhumane and uneconomic situation that affects Nigerian workers and the majority of Nigerians.


.Isiakpu is a media consultant based in Umuahia.

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