LIVING WAGE OR MINIMUM WAGE: ASSUAGING LABOUR’S DEMAND

All over the world the single objective of the labour union has always been to fight for the welfare of workers of which increase take home pay is the prime. The labour union is ready to bring any government to its kneel to ensure that its demand for increase in pay is yielded to. This is not limited to developing or under developed countries, the nature and approach is the same worldwide. In most parts of Africa, poverty is prevalent among the citizenry while the few who found themselves in the corridor of power do everything possible to amass wealth without minding whose ox is gorged.  Hence, workers are ready to place demand on government of the day to pay them “their dues” in order to meet the ever rising cost of living.

Coupled with the consequences of poverty is endemic corruption and sit tight syndrome of African leaders which has jaundiced transparency and good governance. In Nigeria, the persistent fall in the price of oil has made it necessary for government to begin to think of reducing the cost of governance and block leakages. This is particularly germane with the need to fulfil campaign promises by the new government in the area of social security for the unemployed and the poorest of the poor! How the unemployed and the poor would be identified in a country where statistics is a function of who is presenting is another ball game entirely.

But The Basic

It is good we also look at the fundamentals which have to do with wages – minimum wage they call it. Empirically, wages, like the general price level, are supposed to be dynamic. They should be price indices determined, though taking account of inflationary trend and other macro economic variables. Of course, negotiation and bargaining power of unions and responsiveness of bipartite and tripartite machineries are supposed to facilitate wage adjustments including reviews and adjustments of minimum wage law.  In Nigeria, such structures are not just there; except that labour unions meet when there is need for strike or the need to attend the annual conference of International Labour Organisation (ILO) in June every year.

UK Example

It has been said that solutions proffered by the developed countries might not be appropriate for African countries, but there are lessons to learn from their methodologies. In United Kingdom for instance, the living costs vary in different parts of the country, in fact, there is a different rate for London and the rest of the UK; promoted by Living Wage Foundation. Though it received widespread political support, but limited endorsement by employers, yet that didn’t hamper its operations. One wonders while a worker in Gombe State employ (in North East Nigeria) would want to earn the same wage with oil rich Rivers State or Lagos State – the commercial capital of Nigeria. They clearly have different standard and costs of living; hence the need for living wage instead of minimum wage.

Nigeria Situation and Conclusion

On the table in Nigeria today are  issues of total and partial deregulation of the downstream sector of the oil industry, review of revenue allocation formula, reduction in the cost of governance, reduction of the number of the unemployed, poverty reduction, state craft corruption, persistent  falling of Naira in relation to dollar, insecurity due to social dislocations and religious bigotry. Today in the country, state governments depend on the federal government for bail out to pay workers salary, even with that the backlog of salary is still an unmoveable mountain. In the face of these, labour unions are already threatening a need for increase in minimum wage from the current N18, 000 to N90, 000.  A living wage is that which enough for a normal standard of living is.  The state chapters of the labour unions and different state governments should present a template for performance and productivity as well as the cost and standard of living instead of federally determined minimum wage. In doing this, major macro economic variables such as the prevailing inflation, foreign exchange and interest rates and other available social security issues should be considered in conjunction with the federal government. This should be effected in the constitution and then we can have the near accurate living wage.