Democratic Socialist Movement

For Struggle, Solidarity and Socialism in Nigeria

By - DSM

NEW MINIMUM WAGE: Only Mass Struggle Can Guarantee Victory

NEW MINIMUM WAGE: Only Mass Struggle Can Guarantee Victory

By Kola Ibrahim

More than any other times in Nigeria’s history, working people have been further pushed into the cesspit of penury since 2015, thanks to the capitalist economic malaise. While the federal government on two occasions has given states special funds under various guises such as special bailout and Paris club over-deduction repayment, this has not stopped state governments from owing workers and pensioners.

According to reports, about twenty seven (27) states owe workers’ salaries for more than 3 months. This has affected, according to the federal government, over 2 million workers. While, on the basis of the federal government’s interventions the number of states that owe workers might have reduced, the reality is that majority of the states still owe.

Aside this is the fact that the continued payment of salaries, without federal government’s intervention, is unsustainable. For instance, despite federal government’s interventions, Osun, Oyo, Ekiti, Ondo and Ogun States still owe workers and pensioners several months’ arrears, while salaries are still unpaid regularly. Also, various allowances such as leave bonuses, promotional arrears, earned allowances (for university staffs), etc. are being denied workers in many states. This is aside from hundreds of thousands of public sector pensioners across the country, who are owed pension arrears for several months.

The full impact of the salary crisis across the country can be better understood from the standpoint of the falling standard of living vis-Å•-vis high inflation, high cost of accessing social services (where they exist), growing unemployment, among other factors. According to National Bureau of Statistics (NBS), headline consumer price index has increased year-on-year to over 18 percent in January 2017. But while the annualized Inflation rate slightly dipped to 17.78% in February, the month on month inflation rate continue to accelerate.

Despite the media headlines the truth is that the real consumer prices that are directly affecting the common people such as prices of food, fuel, clothing, housing, transport, have increased astronomically. For instance, staple foodstuffs like rice, beans, oil, fish, etc. that average families consume have seen astronomical rise of not less than 50 percent within the last one year. Also, petrol price, the staple fuel for transportation, was raised by the government by 67 percent in May 2016. This has necessitated increase in transport costs. Other fuels such as domestic gas, kerosene and diesel have seen sharp increases of over 100%, 200% and 100% in the last six months. Also, electricity tariffs have increased by an average of 45% in the last one year. Even, 50-cl sachet water rose from an average of N5 to a minimum of N10.

Aside from inflation in the prices of consumer goods is the rise in the costs of accessing social services. Even before the latest economic crisis, school fees in public tertiary institutions have increased averagely by over 100 percent in the last two to three years. This is aside hike that would have been witnessed in the private school system. With the latest inflation rates, clearly cost of accessing education at all levels has increased.

In other social sectors like healthcare and housing, the story is not different. Even before now, costs of accessing healthcare services are exorbitant and unaffordable for majority of the population. Public hospitals that should be accessible to the citizens, especially the working and poor people, are grossly underfunded by governments, leading to poor and commercialized services, hiked fees and incessant strike by medical personnel due to poor working conditions. The growing rate of unemployment has further worsened the situation for workers and pensioners. Many young people who should have been earning income have been rendered economically invalid due to growing rate of unemployment with over 5 million jobs reportedly lost in the last one and half years.

Two points can be deduced from the current situation. First is the fact that the current minimum wage of N18, 000 cannot meet basic needs of the workers in both private and public sector. In fact, when the current minimum wage was legislated in April 2011, the labour leadership had been demanding, since December 2008, N52, 200 as minimum wage based on the prevailing economic indices. A member of House of Representative, ostensibly to counter the labour’s request for N52, 200 minimum wage, sponsored a motion calling for N30, 000 as minimum wage. Therefore, the N18, 000 minimum wage legislated in 2011, as proposed by the Ernest Shonekan Committee, was far less than all expectations. When premised against the cost of living and general socio-economic indices, it will be glaring that the N18, 000 is nothing but a poverty wage.

Of course, increasing minimum wage for those in workplaces with more than 50 workers from N7, 500 to N18, 000 may have appeared significant, the reality is that cost of living had long overtaken the N7, 500 minimum wage legislated in 2001. For instance, fuel price rose from N11 per liter in 1999 to N65 per liter in 2011 (a rise of about 600%). In Obafemi Awolowo University (OAU), Ile-Ife, school fees for a first year student was N1, 050 in 2001, but by 2011, it was already around N40, 000. Today, it is about N100, 000. This means that a worker’s one month salary of N7, 500 could pay the university fees of at least six fresh students in 2001. By 2011, a worker on the same N7, 500 would need to save almost six months’ salaries in order to pay school fees of a fresh university undergraduate. Even, the N18, 000 legislated in 2011 would need to be saved three times before a university undergraduate’s fee could be paid. All this is aside prices of other items and needs, which between 2001 and 2011 have risen astronomically. Therefore the N18, 000 minimum wage legislated in 2011, while it may look like a progress over N7, 500 is still below what is needed to meet the basic needs of workers.

The N18, 000 would mean a meagre N600 per day for workers. For a family of four, this is clearly a poverty wage. To add insult to injury, most employers including state and federal government, and private employers made nonsense of this legislation. Most state governments decided to implement the N18, 000 wage in a perverse way. While they increased salary of least paid worker to N18, 000 (most of them were already close to N18, 000 when allowances are added), a retrogressive pro-rata increment was effected for most workers who were already earning above N18, 000 as salary. In the private sector, aside the same arrangement taking effect, the rate of casualization increased with many workers employed on casual and temporary appointment, and thus unable to enjoy the full benefit of the minimum wage. This was a ploy by employers, both in the private and public sector, to bypass the minimum wage law.

Therefore, the old minimum wage of N18, 000 was not even near sufficient for workers when it was legislated and implemented. Since then, cost of living has been on the high side. If the labour leadership demanded N52, 200 minimum wage as at 2008, based on existing socio-economic conditions, it stands to reason that even that N52, 200 demand is not sufficient anymore given the current objective economic reality as analyzed earlier.

However, the deliberate denial of salaries and pensions to workers and retirees respectively by the government and private employers, will not only further impoverish the working people given the harsh economic situations of the country, but will also be used as excuse by employers to shy away from paying a higher new minimum wage. The employers’ approach is to make workers struggle endlessly for the payment of their salary arrears, so that the issue of fighting for a new minimum wage will look remote to them. This is where the role of a fighting leadership of labour movement then comes in.

The real task before the labour movement is not to accept the arguments of the governments and the austerity attacks being launched on working people, but to begin in earnest the struggle to resist them. If the labour leadership allows the ruling capitalist class to continue this impoverishment, this situation can be institutionalized, and become a new norm. Unfortunately, the responses of labour leaders across the country to the erosion of living standards of working people, especially on the issue of non-payment of salaries, fall in value of naira and consequent rise in cost of living, new minimum wage and casualization, leave much to be desired.

Therefore, unless the labour leadership proceeds from the argument that the current economic crisis is a product of the maddening rackets undertaken by all sections of the capitalist class, it will be bound to accept the argument of shared pain being propounded by the ruling class. Only by placing the blame of the crisis at the door step of the ruling class and the neo-colonial, neo-liberal capitalist system will the labour leadership be able to garner adequate force ideological, political and numerical in defending the rights and living standards of all sections of the working class.

Unfortunately, the labour leadership seems to have accepted the argument that the economic crisis was caused by all and the pain must be shared by all. If not openly said, the approach and rotten concessions the labour leaders, at state and national levels, have given to the employers both in the private and public sectors, are clear signs of this. Labour leadership is currently involved in negotiation with governments and employers on the new minimum wage. However, the approach of the labour leaders, which tend to place too much trust in negotiation, rather than mobilizing the workers in mass struggles to ensure immediate implementation of the minimum wage, has the tendency of undermining the struggle for a new living wage.

Aside from issuing statements condemning government delay tactics, there is no clear plan on the part of the labour leadership to call out workers to struggle. A well mobilized 24-hour or 48-hour warning strike, matched up with national demonstrations across the country will send appropriate message to the employers that workers will no longer accept poor wages. This coupled with mass action for full payment of outstanding salaries and pensions, will lay the basis for mass mobilization of workers and pensioners in case the governments and employers refuse the new minimum wage.

However, in order to permanently resolve the attacks on workers’ welfare, the labour leadership would have to provide a genuine alternative through socialist economic programmes. Struggle now can win change. For instance, cutting emoluments of 18, 000 political officers by at least 50 percent will provide extra N700 billion to start to fund social programmes such as free and quality education at all levels, free quality healthcare at the point of use, etc.

Also, as against the fraudulent contract system that allows multimillionaires and billionaires to be made from award of contracts at the expense of the society, public works departments can be established across the country to undertake public works and construction projects such as road construction, expansion and rehabilitation, school building, refurbishment and renovations, mass housing projects, mass waterworks, etc. Under genuine democratic control this helps to begin to provide secure, decent and regularized employment for millions of people, including several thousand currently employed on insecure and irregular bases by private contractors, who underpay workers and casualize labour. Furthermore, it will allow for holistic developmental planning and consistent project execution.