Nigerian Labour Congress and Fight for Minimum Wage – Analysis

Nigerian Labour Congress (NLC) President Ayuba Wabba, who led a recent protest in the Nigeria’s Federal Capital Abuja, decried how little and insufficient the current minimum wage is, especially with the current exchange rate and inflation in Nigeria.

A minimum wage of 30,000 Naira as proposed by the Nigerian Labour Congress NLC, has been overtaken by market forces especially the continued high inflationary level of consumer prices. The new minimum wage translated into so much in the pockets of the workers but so little in the market place where the cost of living and the fate of the workers are determined.

Which leads us to many questions like…should the NLC be going on strike or fighting for a 30,000 naira minimum wage or should there be other negotiations to be discussed with the federal government considering the economic realities on the ground especially with the latest figures released by the National Bureau of Statistics NBS that Nigeria’s inflation rate climbed to a 34-month high, rising to 17.33% in February from 16.47% in January 2021.

Honourable Garba Mohammed (APC, Kano) introduced a bill in the National Assembly; That seeks to allow the federal and state governments each to freely negotiate the minimum wage, It passed the second reading in the House of Representatives on February 23.

Should the bill become law, the federal government will not have exclusive jurisdiction to determine a national minimum wage and states will now have the power to determine their own minimum wages.

US $15 minimum wage Concerns

Meanwhile, US President Joe Biden’s proposed minimum wage increase would cut 1.4 million jobs but lift 900,000 people out of poverty, according to a study as many concerns are been raised.

The Congressional Budget Office, for example, projected that an increase to a $15 minimum wage by 2025 could mean an average of 1.4 million jobs lost, a fall in business revenues leading to a $9 billion drop in real income, and increases in the prices of goods and services across the economy.

As arguments for raising minimum wage remains or continues to heat up, new research shows that raising the minimum wage improves workers’ productivity and lifts people out of poverty, but generally Firms respond to these higher labour costs by reducing employment, reducing profits, or raising prices.

According to a report by the US Congressional Budget Office, the overall increase in earnings outweighs those lost through the projected job cuts.  In other words some will win and some will most definitely lose.

In the meantime, NLC, TUC have argued, should the minimum wage be decentralised there will be a lot of confusion and discrepancies. While the National Assembly claims moving the minimum wage from exclusive list to concurrent list would enable each state to handle workers according to their capacity.