The history of Minimum Wage in Nigeria dates back to 1981. This was when the Federal Government established the Minimum Wage Act, which set the minimum wage at ₦125. In 1990, the minimum wage was increased to ₦250, and in 1998, it was raised to ₦3,000. In 2000, the minimum wage was increased to ₦5,500, and in 2011, it was raised to ₦18,000. In 2019, the Minimum Wage Act was signed into law by former President Muhammadu Buhari, setting the minimum wage at ₦30,000.
Organized Labour, comprising the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), has rejected the Federal Government’s latest offer of ₦60,000 as the new minimum wage for workers. This is the fourth proposal in about two weeks since Negotiation talks resumed. The labor unions had initially demanded ₦615,000 as the new minimum wage but the union reduced their demand to ₦497,000 last week and then to ₦494,000 on May 28, 2024.
Committee yet to agree with union and OPS regarding negotiations.
Also, the Tripartite Committee for the negotiation of a new minimum wage for Nigerian workers is yet to agree on a new minimum wage, with the government and the Organised Private Sector (OPS) proposing ₦60,000, ₦57,000, ₦54,000, and ₦48,000, all of which have been rejected by the labor unions. The labor unions argue that the current minimum wage of ₦30,000 can no longer cater to the wellbeing of an average Nigerian worker, and that not all governors are paying the current wage award, which expired in April 2024.
NLC President Joe Ajaero described the fresh proposals by the government as “unsubstantial”, stating that the Economy of workers is totally destroyed and that there are two economies in the country – the economy of the bourgeoisie and the economy of the workers. The labor leader emphasized the need to harmonize the two economies to find a meeting point. The negotiation talks are ongoing, with the labor unions insisting on a higher minimum wage to meet the contemporary economic demands of workers. The deadline for the negotiations is May 31, and the labor unions have threatened to embark on industrial action if an agreement is not reached by then.
Demand for a restructuring of wage structure in Nigeria.
This issue has been a contentious one in Nigeria, with labor unions arguing that the current wage is inadequate to meet the rising Cost Of Living in the country. The government, on the other hand, has argued that it cannot afford to pay a higher minimum wage, citing Revenue constraints and the need to prioritize other sectors of the economy. Despite the challenges, the labor unions remain resolute in their demand for a higher minimum wage. They argue that the current wage is not only inadequate but also unsustainable, and that a higher wage is necessary to ensure that workers can meet their basic needs. The minimum wage issue is not just about the workers; it also has implications for the broader economy.
A higher minimum wage can lead to increased consumer spending, which can boost economic growth. It can also help to reduce Poverty and inequality, as low-income workers are more likely to spend their earnings locally, thereby stimulating economic activity. In addition, a higher minimum wage can help to reduce the burden on the government’s social Welfare programs, as workers who earn a higher wage are less likely to require government assistance. It can also help to improve productivity, as workers who are paid a higher wage are more likely to be motivated and productive.
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Of course, the labor unions are not just demanding a higher minimum wage; they are also calling for a review of the entire wage structure in the country. They argue that the current wage structure is outdated and does not reflect the current economic realities in the country. The government, on the other hand, has argued that it cannot afford to pay a higher minimum wage, citing revenue constraints and the need to prioritize other sectors of the economy. However, the labor unions argue that the government can afford to pay a higher wage, citing the billions of Naira that are spent on non-essential items such as luxury cars and private jets.