Wednesday, 3 July 2013

Article: Nigeria Labour Congress And Minimum Wage


By Salihu Moh. Lukman

Once again the issue of minimum wage is reverberating in the Nigerian media following the consideration by the National Assembly to move it from the exclusive list to the concurrent list in the 1999 Nigerian Constitution. By that proposal of the National Assembly, Part I, item 34 of Second Schedule will be amended to move the sentence “prescribing a national minimum wage for the Federation or any part thereof” to Part II.

The NLC has registered its opposition to this proposal arguing that the “removal will unnecessarily expose Nigerian workers, especially those in the low-income bracket with grave implications for security, productivity and national well-being, as most state governments if given the latitude, will pay wages as low as one thousand Naira per month in spite of the relative enormous resources available to them.” This was contained in a statement by the NLC President, Comrade Abdulwaheed Omar.

While the position of the NLC is very understandable, it is however founded on a very weak and erroneous premise. In the first place there is the implicit assumption that there is relatively “enormous resources available” to all governments and perhaps all employers in the country. Related to that is the apparent conclusion that the “enormous resources” are equitably distributed to all employers across the country, be it public or private.

It needs to be emphasised that minimum wage law is applicable to all employers – private and public. Partly because the process leading to passage of the 2010 Minimum Wage Act was dictated by the capacity of the Federal Government to pay N18,000 should not cover the reality that many employers, including some state governments have been unable to implement the N18,000 minimum wage. This much was acknowledged in the statement by Comrade Omar. This highlights the existence of a problem which may also translate into wiping out some small employers out of business with the consequence of all workers employed by such employers thrown back to the labour market.

There is certainly both conceptual and empirical problem with respect to the framework for minimum wage legislation in Nigeria. While it may be advantageous today for Nigerian trade unions based on some faulty notion of statutory awards that would threatened employment as well as almost proved impossible for unions to enforce, it could be debated that in the long run it may be a disadvantage. Imagine a scenario whereby either price of Nigerian crude in the international market crashed or the market become smaller. If the argument for “enormous resources” is informed by current revenue from oil as determinant for minimum wage and not workers output or production levels, the NLC position with respect to minimum wage is to say the least injurious to Nigerian workers.

The point is, it is wrong to hinge argument for current statutory framework for minimum wage in Nigeria based on a pedestrian belief that there is relatively “enormous resources”. Relative to what? This is the common perception in the country today, which has impacted negatively on productivity and has virtually reduced most Nigerians to rent-seeking behaviours. The dignity of labour and the human person is commonly sacrificed on the alter cheap search for free money. Contractual responsibilities have been reduced to nothing.

It is important to emphasise that relatively “enormous resources” is a perception that is easily justifiable with reference to perhaps current levels of revenue from crude oil and not necessarily taking into account work indices, especially issues of workers output and its contribution to national wealth. Against the background that today, Nigeria earns more than N8 trn annually largely from crude oil, the temptation to conclude that our governments at all levels enjoy relatively “enormous resources” is appealing.

No doubt, with reference to our recent past as a nation whereby the total annual revenue of government was in the region of N2 trn, current levels of N8 trn is relatively “enormous”. The critical reality however is that this increase in revenue is not shared proportionately. On account of what can we regard states like Ebonyi and Nasarawa as enjoying “enormous resources” with less than N4 billion monthly from the Federation Account, while states like Akwa Ibom and Rivers receive more than N20 billion monthly. Perhaps with reference to a personnel cost of approximately N500 million for Ebonyi and Nasarawa, the argument for “enormous resources” may be sustained.

This financial profile is almost re-enforced by IGR profile of these states. Based on CBN 2010 Report, Akwa Ibom is reported with more than N1 billion monthly IGR and Rivers close to N5 billion monthly. Contrastingly, Nasarawa and Ebonyi were reported with less than N200 million monthly IGR. Now what will be the logic of equating the pay of workers in Akwa Ibom and Rivers with that of Nasarawa and Ebonyi?

With monthly personnel cost of approximately N500 million and monthly IGR of under N200 million, a situation where FAAC receipt crashed can be better imagined. How then can anyone be making a case for wages based on such a loose foundation? In many cases, one is tempted to argue that NLC argument as presented by Comrade Omar is driven by large dose of intellectual and organisational indolence. Given that Nigerian trade unions are almost completely absent today in all our national policy debates, they have lost rational reasoning and relied more on grandstanding and brinksmanship as a strategy, which has reduced NLC’s, and of course trade unions’ pre-occupation in the country to dominantly that of organising strikes. Nigerians today hardly hear of NLC and trade unions activities except when strikes are declared.

Logically and historically, this will not be defensible. NLC and Nigerian trade unions have been vibrant centres of first and foremost intellectual contestation which get reflected and manifest in the way union leaders relate with governments. That was the reality that projected union leaders as popular representatives of Nigerian people from the days of Imoudu to more recent eras of Summonu, Chiroma, Pascal and Adams. Unfortunately, that is withering away with the current generation of union leadership. It is a painful reality, which accounts for such faulty and weak arguments with respect to minimum wage. This needs to be addressed urgently.

The point is, elementary analysis would caution about the consequence of adopting a bandwagon framework for minimum wage legislation that is not informed by economic indices that are related to work output. Such a framework can only result in either shortchanging workers in high-revenue states/areas or over-stretching employers in low-revenue states/areas. Certainly, a review of wage fixing theories would highlight these challenges and perhaps dangers.

It needs to be stated emphatically and unequivocally that although there is increased revenue which has resulted in improved financial profile of especially states and federal governments in the country, it has not favourably alter the structure of government finances. The main predictable reasons would be factors of corruption. Besides, given characteristically unstable international oil market, current levels of oil revenue are hardly sustainable and therefore to plot them as determining variables for price indices such as minimum wage with long term implications would be almost suicidal.

Be that as it may, there are certainly challenges that need to be addressed. The challenges border on ensuring that there is in truth “enormous resources” to guarantee higher levels of wages in the country, in the context of which issues of minimum wage can be correctly computed taken all indices into account. NLC should approach this based on a strategy of strengthening its own organisational capacity and not look for easy quick-wins that are not sustainable, which include a faulty constitutional provision such as the provision of item 34, Part 1 of Second Schedule of the 1999 Constitution.

As it stand, item 34 of Part 1 of the Second Schedule is not is not sustainable and could only expose Nigerian workers to greater risks and danger. Being conversant with internal logic influencing leadership thinking in Nigerian trade movement, it is quite worrisome that NLC is approaching these matters less objectively. It has never been the case that workers will get justice on matters of employer/employee relations bordering on pay and entitlements with simple reference to the law. Had that been the case, there would be no need for unions. The business of unions will always be to develop strategies and carry out actions that can result in improved working conditions and better pay. These are issues bordering on workers input to the process of revenue generation. The big worry is when matters of pay and benefits are delinked from these factors, which appears to be the logic of the NLC argument with respect to national minimum wage legislation in Nigeria.

Of course it could be argued that this has been the case, perhaps since the 1970s. That it has been the case does not make it right. What has been the tradition of NLC and Nigerian trade unions is the courage to campaign for what is right especially in relation to workers benefits and welfare. It is a matter that requires good measure of intellectual and political capacity. The position of NLC with respect of minimum wage fixing in Nigeria is weak intellectually and politically unfounded.

Part of the political imperative is the need to engage our national politics in such a way that workers entitlements are not threatened by factors of bad governance which include corruption. This is where the recent NLC scorecard is low especially given the standards that it is known for. NLC’s voice on matters related to our political development as a nation has been very remote. Partly as a result of that, Comrade Adams Oshiomhole had at the TUC Conference on June 21challenged organised labour “to stand up and be counted”.

Union organisation and their political roles on matters of governance are important in this respect. Somehow, it would appear that Nigerian trade unions, including the NLC have vacated their political roles and in the circumstance their capacity to correctly assess national realities and intervene based on rational consideration is weak. In so many ways, Nigerian trade unions and NLC are very lucky to have rich reservoir of history and public goodwill on account of which currently leadership seems to be very relaxed.

In summary therefore, the message to NLC and all Nigerian trade unions is that they need to wake up and reconnect themselves with their historic responsibilities. This calls for good initiatives towards organisational strengthening, conscious effort to produce knowledgeable leadership with high integrity and above all high moral standing. Challenges facing Nigerian workers today go beyond legal provisions. It is more a capacity issue in many respect. A situation where the main business of unions is only strikes with hardly no voice on national policy and governance issues will at best project unions and their leaders as pedestrians and opportunistic, which over the years they have proved not to be.

Nigerian unions and NLC in particular have always been source of hope for our country at very trying period. So far, Comrade Omar and his team in NLC can do much more. Their intellectual, political and organisational capacity can provide much more than what they are give the nation today. The danger is that current leadership of NLC and Nigerian trade unions may be presiding over the systematic demobilisation of Nigerian workers. They need to consciously prevent that from happening.

(Lukman can be reached on: smlukman@gmail.com)


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