The Controversies of the National Minimum Wage

The Controversies of the National Minimum Wage

Since it was passed into law in 2011, the N18,000 national minimum wage has been a source of controversy that has pitched state governments against their workers.

Though, it has been hailed in certain quarters as one of the major achievements of the president Goodluck Jonathan-led administration, yet most state governors have not supported the idea of national minimum wage.

The state governors have argued that they should be allowed to dictate what they can pay their workers. The argument is hinged on what they describe as the disparity in the federation allocation accruing to the different states of the federation.

Also, some opponents of the national minimum wage argue that as cost of living is more expensive in some parts of the country than others, there should not be a uniform payment for all workers across the country.

Yet, the organised labour argues also that if given the opportunity to fix their respective minimum wages, state governments “would not hesitate to pay minimum wages as low as N1,000 to their workers in spite of the huge resources available to them.”

It will be recalled that it took many years of agitation from organised labour and Nigerians in general before the Senate had to fast track the passage of the bill to amend the National Minimum Wage that provides N18,000 as the least that could be paid to the lowest paid worker in the country.

Before then, the national minimum wage was from N7,500. Specifically, Section 1(1) of the bill states that; “As from the commencement of this Act, it shall be the duty of every employer (except as provided for under the principal Act as amended) to pay a wage not less than the national minimum wage of N18,000 per month to every worker under his establishment.”

More than two years after it was passed, governors of about 20 states have refused to pay the N18,000 minimum wage. An action which has drawn the irk of various labour unions.

However, the recent decision by the Senate to decentralise the national minimum wage and its excision from the exclusive legislative list to the concurrent legislative list in the 1999 Constitution currently undergoing amendment, has attracted several reactions.

The upper legislative chamber had unanimously voted that the minimum wage should henceforth be handled at the state level; a decision which many observers had described as anti-people, stating that it will deprive workers of their hard earned remuneration.

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Though the lawmakers had hinged their decision to remove minimum wage from the exclusive list on the need to protect and nurture the nation’s democracy, but observers in the industry are of the opinion that the senators may be yielding to pressure from the Nigeria Governors Forum, which has been widely reported to be against some popular proposals on critical sections of the constitution such as the minimum wage and local government autonomy, which most Nigerians advocated should be included in the new constitution.

Labour Kicks

The country’s two labour centres, the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC), however, castigated Senators for voting in their constitution amendment proposal to decentralise the national minimum wage.

NLC President, Abdulwaheed Omar, described the Senators’ action as self-serving and anti-people.

The new amendment stipulates that issues of emoluments for civil servants have been successfully exited from the Exclusive Legislative List to the Concurrent List, empowering the Federal Government to create minimum wage for federal workers alone, while the respective states fix their salary structures for their workers.

Omar, however, said the Senate erred in voting for the amendment, arguing that the private sector which also forms a vital segment of the society was not captured in the amendment process.

According to Omar, the amendment has only promoted two regimes of minimum wage in the country – the federal and state – which violates the principle of true federalism, adding that the resolution also violated the International Labour Organisation (ILO) Convention 131, which the country is a signatory to.

Omar stated: “In one breath, the Senators proposed decentralisation of minimum wage against the people of Nigeria eroding the earning power of vulnerable workers, and at the same time gleefully and overwhelmingly voted for life pension for the leadership of the Senate!

“Our Senate has become self-serving and anti-people. Never in the history of this country, not even in the military era, have we witnessed such a charade and travesty on the popular wish of the people as was displayed at the Senate.

“Thus, two regimes of minimum wage will now exist in Nigeria (federal and state). Government as an employer may have done a duty. What about government as a sovereign authority, socially contracted to all its citizens? Here, we think the Senate has failed the nation.

“To us, as is the practice globally, constitution amendment should be made a process-led approach and a bottom up exercise. Short-changing the will of the people through ‘voting’ that deprives workers and working families their hard won and collective patrimony, obliterates the very essence of legislature as the mouth piece of the people.

“This attempt to alter the jurisdiction of minimum wage legislation is an aberration to our quest for democratic governance to reflect people’s aspiration, as it has turned a supposed people’s institution as the Senate into iron law of oligarchy.”

However, a public commentator, Isah Aremu who opposes the national minimum wage said, “In a federal structure we cannot impose the same wage on the different levels of government. We cannot seat in Abuja and legislate that there should be the same salary structure for everybody. The time has also come for us to look at the Constitution, and evolve laws consistent with the principles of federalism, which include moving the wage from the exclusive legislative list so that the various tiers of government can legislate on what they can pay.

“It is also time for revenue commission and the salary and wages commission to index wages against cost of living. It should not be all the time that we should always come to the National Assembly to increase wages,” he stated.

Minimum Wage in Other Clime

The concept of a national minimum wage evolved in most countries from the genuine concerns over growing incidences of the working poor and the need to protect the most vulnerable in society.

For instance in developed countries like the United States of America (USA), which has the biggest economy, many states already pay more than the federal minimum wage.

For example, Illinois, Nevada and Connecticut pay workers a minimum of $8.25 an hour, which is above the federal minimum wage of $7.25 an hour. In Vermont, minimum-wage workers receive $8.60 an hour while in Oregon, the minimum wage is $8.95 an hour. Finally, Washington currently tops the nation with a $9.19 -per-hour minimum wage. The wage is indexed to the federal Consumer Price Index. 

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