So, you have heard the term ‘minimum wage’ being bandied all over the place since you came of age.
You have seen workers embark on a strike on account of minimum wage.
You grew up to learn that labour unions and the government can embark on a strike when there is a disagreement over minimum wage.
This article will explain what minimum wage really means and why it’s so important for workers in Nigeria and elsewhere in the world.
What is the meaning of minimum wage?
Minimum wage basically means the lowest salary permitted by law or agreed upon, following negotiations between the labour union and government.
Minimum wage encompasses workers in the private and public sectors because private sector players are members of labour unions or the nation's labour force.
It is the least amount you should pay anyone in your country as monthly take home. Of course you can earn far higher than a nation’s minimum wage but you shouldn’t earn lesser than the minimum wage.
When labour says it is negotiating for a minimum wage, it is doing so for every worker in that nation’s geographical space.
Let’s touch on the history of minimum wage in Nigeria
The first elected President of the Nigeria Labour Congress (NLC) was a man named Hassan Sunmonu. He was elected President of the NLC in 1978.
Before Sunmonu, there was no structured minimum wage for Nigerian workers.
When political office holders were handed a pay rise at the time, Sunmonu’s NLC commenced agitation for a structured minimum wage.
In 1981, the NLC clamoured for a minimum wage of N300. When the Shehu Shagari led federal government refused to pay this amount, labour called for a nationwide strike that paralysed the economy.
Eventually, the Shagari administration and Sunmonu led NLC settled for a minimum wage of N125.
In 1989, labour asked for a new minimum wage. During this period, Pascal Bafyau was NLC President. When it got down to negotiations, a certain Adams Oshiomhole who was Bafyau’s deputy, led the talks with the government. The minimum wage was increased to N250 afterwards.
Between 1989 to 2001, the minimum wage went from N250 to N3000 and from N5,000 to N7,500.
In 2010, President Goodluck Jonathan increased the nation’s minimum wage to N18,000.
Labour has been holding talks with federal government for a review of the minimum wage and the government has just announced that N24,000 will be the new minimum wage.
Three NLC Presidents after Bafyau—Adams Oshiomhole, Abdulwahed Ibrahim Omar and Ayuba Wabba, were instrumental to the review of the minimum wage from the late ‘80s to the present day.
Why are minimum wages reviewed periodically and is N24,000 a good minimum wage right now?
As inflation rises and the purchasing power of the average Nigerian reduces, the minimum wage has to be periodically reviewed upwards.
Inflation is currently in double digits, the Nigerian economy only just emerged from its worst recession in 25 years and economic growth has been sluggish under President Buhari. All of which means that the value of the Naira in your pocket has depreciated and you need more money to purchase the same amount of goods.
The N24, 000 proposed as new minimum wage remains painfully inadequate for millions of Nigerians, it has to be said.
However, even at N18,000, most State Governors were unable to meet obligations to workers in the civil service. If the minimum wage is increased too high to say N50,000, several States would be owing workers backlog in salaries.
In the final analysis, Nigeria's minimum wage is often a no-win situation for everyone.