Is NLC/TUC negotiating for a national minimum wage or a federal minimum wage? by Michael Chibuzo
Since the commencement of negotiations for a new national minimum wage by the Tripartite committee made up of the government representatives (FG, states and LGAs), organised private sector and labour movement, I have been watching closely the body language and rhetoric emanating from the organised labour, especially the Nigerian Labour Congress, who also double as the Trustees of the Labour Party.
In particular, since the emergence of Mr. Joe Ajaero as the President of the NLC, that body has become increasingly partisan and progressively bereft of tact and direction. It is important to note that the NLC is supposed to be an umbrella organisation for some trade unions in Nigeria with membership cutting across both the public and private sector, but more of public sector workers. The NLC has around 43 affiliates, which boast of more than four million members. It has members from the public sector spread across the federal, state and local government levels.
However, from the utterances of the NLC and its President, Joe Ajaero during this minimum wage negotiation saga, it appears its focus is squarely on the federal government. This leaves one to begin to wonder if the NLC is actually out there to negotiate a minimum wage on behalf of all its members spread across the federal, states and local governments and even in the private sector or it is basically trying to engage in a prolonged macabre dance with just the federal government.
Ajaero and the NLC have been playing a political game as can be seen in the contents of the open letter it jointly published with the TUC explaining why it is striking. I will dissect the letter bits by bits.
In the second paragraph of their letter, the NLC and TUC correctly defined the national minimum wage as “the national benchmark threshold below which no employer of labour can pay a worker”. From the definition NLC and TUC put out themselves, it is clear that every employer of labour, whether government or private sector employer, is involved in the minimum wage conversation.
The NLC and TUC however immediately sharply deviated from their definition by directing the rest of their letter to the federal government, which is just one employer out of the four categories of employers the NLC, TUC and other labour unions were supposed to be negotiating with (namely, federal govt., state govts., local govts. and private sector employers). It was as if NLC and TUC had a bitter grouse against the federal government.
In the last paragraph on page 1 of their letter, the NLC and TUC showed their mischievous hand a bit by converting the first minimum wage of N125 that came into effect in 1981 into US dollars and in trying to falsely insinuate that Nigerian workers have ‘progressively earned backwards to poverty’, converted the $188, which was the 1981 equivalence of N125 into Naira using today’s exchange rate. They completely forgot to also do the purchasing power parity calculations. Meanwhile Nigeria doesn’t spend in dollars, so it is strange for a labour union to convert minimum wage to dollars just to push a misleading narrative.
In paragraph 1 of page 2 of their open letter, the NLC and TUC focused basically on the offers allegedly made by the federal government only, while completely keeping quiet on the offer made by the other tiers of government (states and LGAs) as well as the private sector, who are employers too. If truly the NLC and TUC duo are fighting for their combined total membership which is over 10 million workers, they would not be unduly focused on what the federal government’s offer is since the federal government employs just 1.2 million of its members. Who then looks after the interest of the other 90% of their members?
NLC and TUC in page 2 of their letter went on to accuse the FG of failing to reciprocate their reduction from the N615,000 initial demand to N494,000 instead they made small jumps in their counter-offer that eventually nestled at N60,000. They forgot to see the fact that their own reduction from N615,000 to N494,000 in itself was a sign of unseriousness. I don’t know if they felt that for every reduction they made, the federal government (obviously they’re not interested in the other employers’ offer) would have to add extra money to their own offer. Negotiations for minimum wage do not work like that.
The NLC and TUC must understand that minimum wage does not just revolve around cost of living. The ABILITY of the employer to pay is an important factor in determining the minimum wage, so also the level of productivity involved. A business owner cannot pay a labour cost that would liquidate his business. The ability of the private sector to pay is therefore, of more importance in the minimum wage negotiation than government’s ability to pay since the vast majority of workers are in the private sector and their employers need to make profits to continue surviving unlike the governments that are not profit-oriented. The government can always find ways to pay its least worker far above the minimum wage.
In fact, Article 3 of the Minimum Wage Fixing Convention, 131 that NLC and TUC quoted in their letter states as follows:
“The elements to be taken into consideration in determining the level of minimum wages shall, so far as possible and appropriate in relation to national practice and conditions, include:-
(a) the needs of workers and their families, taking into account the general level of wages in the country, the cost of living, social security benefits, and the relative living standards of other social groups;
(b) economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment.”
The NLC and TUC are actually demanding for a living wage (not a bad thing on its own), however living wage must not necessarily be the national minimum wage. Living wages are generally higher than minimum wages. In fact, according to ILO itself, living wages are voluntary, which means employers can choose whether to offer them based on certain circumstances while minimum wages are required by law. They also said that living wages should not be a one-size-fits-all approach and should reflect local or regional differences within countries. NLC and TUC want to force a living wage calculation to become Nigeria’s national minimum wage.
Let’s continue with the open letter. NLC and TUC further exposed their lack of focus as well as appetite for political rhetoric against the federal government only (one of the employers they’re supposed to be engaging) when in the last paragraph of page 2 and first two paragraphs of page 3, they descended into the political arena like an opposition political party to accuse the federal government of profligacy while offering workers (I don’t know if the FG employs all the members of NLC and TUC) a “very paltry sum”. To be clear, I am not against questioning government profligacy by anyone but certainly not in conversation of national minimum where government employs only a fraction of the workers.
Meanwhile, to buttress their charge of profligacy they listed some items in the 2023 supplementary budget passed by NASS and described the budget as “a competition for luxury and ostentatious items”. The ‘ostentatious items’ they listed include naval yatch, renovation of the President and VP residences, First Lady vehicles, vehicles for the presidential villa and presidential Air Fleet. Now I’m at a loss how all these items totalling N38.3 billion came into the conversation of a NATIONAL MINIMUM WAGE meant to be payable by ALL employers in the country. NLC and TUC have simply lost focus. If for instance the listed items were expunged from the budget, would the N38.3 billion be used to fund 1,547% increase in salary for all private and public sector workers?
Until the NLC and TUC focus squarely on the true definition of a National Minimum Wage, and stop making it all about the federal government, they would not be doing their members any good. Their tirade in the open letter is all about the federal government as if the federal government is the sole employer of labour in a capitalist Nigeria. Their last paragraph on page 3 paints a picture of a political movement in a capitalist Nigeria fighting a class war with the government instead of a Labour movement negotiating for a national minimum wage with employers that cut across federal/state/local governments and the private sector.
Another reason that the NLC and TUC gave for embarking on the strike was an increase in electricity tariff. Before I continue, it is necessary to state that in September, 2004, the then Chief Judge of the Federal High Gourt, Justice Roseline Ukeje, in a judgement declared that the NLC lacks any legal power to call a general strike over government policies. That judgement has not been set aside.
NLC and TUC cannot force the federal government to continue paying electricity subsidies to keep electricity tariffs low. If government revenue cannot sustain endless subsidies, something must give way, going on strike won’t solve the problem. The power sector is mostly privatised and it is unfair for the labour union to blackmail the government into keeping prices fixed. Part of the issue of poor electricity generation and supply boils down to inadequate cash flow in the electricity value chain. Also, contrary to the insinuation of the NLC and TUC, only those in band A witnessed a tariff hike. The vast majority of electricity users in Nigeria are still paying their old tariffs, at least for now.
The NLC and TUC at the concluding part of their open letter shot themselves on the feet and exposed their hypocrisy and senseless grandstanding when in their attempt to support their argument for the reversal of the electricity tariff hike said:
“In the light of the excruciating economic conditions where manufacturers are not selling and are piling products in warehouses because buyers do not have the money to buy, businesses cannot afford additional increase in the unit cost of production – a cost that will be ultimately transferred to the workers.”
Arising from their above position, the questions reasonable people need to ask the NLC and TUC include:
1. If, like they said manufacturers are not selling and therefore cannot afford additional increase in their unit cost of production, are they not aware also that increasing the minimum wage these manufacturers are expected to pay their workers by 15 times will invariably skyrocket their unit cost of production – a cost that will also be ultimately transferred to the workers and other consumers?
2. Between a 212% increase in electricity tariff and a 1,547% increase in workers’ MINIMUM wage, which one has the tendency to liquidate a business?
As I conclude, I want to implore both the NLC and TUC to remove their partisan cap and get down to reasonable negotiation for a comprehensive national minimum wage for all of its members and not just federal government employees. If the unions want to help improve the living conditions of majority of its members, they must negotiate for a wage that the private employers, who employ the vast majority of workers, can pay without having to close down their businesses and render millions of people jobless.
The NLC and TUC must equally pay attention to the implementation of the new national minimum when its eventually in place, by the states and local governments and most importantly, private employers. Also, if they are serious about living wage, after the minimum wage is negotiated, they can open separate demand for living wages for their members on a case by case basis. It is at this point they can bring on the issue of federal government profligacy while arguing for a living wage for its members employed by the federal government. I will support that move wholeheartedly.
They should also work towards restructuring work hours in such a way that allow workers to have multiple jobs to earn more incomes that would comfortably take care of their cost of living. Pension contributions by private employers must also be a priority fight for the NLC and TUC. Employers must remit pension deductions from the salaries of their employees in addition to their own contributions to the RSAs of workers. Anything other than these, simply means the Labour movement is just interested in a FEDERAL MINIMUM WAGE and not a NATIONAL MINIMUM WAGE or fair wage and labour practices for the vast majority of their members.
