Published On: Fri, Oct 25th, 2019

Minimum wage: Can workers now smile?

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The Federal Executive Council (FEC) has finally ratified the payment of the agreed N30,000 minimum wage and the consequential adjustments affecting senior civil servants in government.
The final conciliatory agreement between the government and the organised Labour followed series of nocturnal engagements bordering on strike threats.
The sincerity of the federal government was demonstrated by the Council’s order that all arrears bordering on the increase occasioned by the minimum pay rise be settled by all its agencies by the end of December this year. This is obviously good news to the workers, at least at federal level.
The battle for the minimum wage has, of course, shifted to the state governments. Only a few states have demonstrated their willingness to pay the N30,000 minimum wage. Added to this challenge is the burden of having to engage senior officials on consequential adjustments.
The raise in workers’ pay has ballooned the states’ financial obligations at the face of dwindling income. Some of them are already squeaking under the weight of debts. Those states that benefitted from the bail-out funds have been told to start paying back into federal government’s coffer. This gives an indication that workers at the state and local government levels may not smile so soon like their counterparts at the federal.
It is however expected that the state governments financial fortune will improve by next year when the increase in Value Added Tax (VAT) from 5-7.5% is expected to be implemented. The chunk of the money realized from VAT statutorily goes to the states.
However, state and local governments must look inward to improve their internally generated revenues (IGRs) to be able to raise funds in order to settle the anticipated raise in overhead budget and developmental projects.
Will workers actually smile? Considering the reality on ground, the increase in wages will make little impacts in the lives of the workers. This is because prices of foodstuffs and commodity are on the rise. Inflation has already made nonsense of the accompanying joy in the workers’ pay raise.
It is therefore expected that the government will not stop at raising workers’ wage but intensify investments in infrastructure and human capital projects in order to make life easier for the masses.
Transportation has been identified as the main challenge to commerce in the country. Government must therefore rehabilitate the dilapidated road networks across the country to ease movement of goods. Execution of rail projects must equally be expedited to reduce cost of transportation.
Apart from this, government should invest more into the nation’s health and education sectors. Medicare for adult and children should be made available and affordable. Only by doing this can the workers live meaningful life with the raise in their pay. That is the only time they can truely smile.

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