Renegotiating The Minimum Wage

In Nigeria, the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) have lamented the minimum wage paid to thousands of workers nationwide. In 2019, The minimum wage was increased to ₦30,000 by former president Muhammadu Buhari. This increment, however, failed to satiate the needs of minimum wage earners because of the country’s economic plight and persistent inflation. Prices of goods and services have doubled, resulting in hardship for the recipients and their dependents. Increments to the minimum wage are never offered on a platter; the circumstances surrounding the increments witnessed in Nigeria’s history always involve civil organisations and trade unions locked in a struggle with the government.

Clamours for minimum wage increments have been frequent since the formal establishment of the National Labour Congress in 1981. One of the landmark moments in Nigeria’s minimum wage history occurred in 1981 when the country implemented its first national minimum wage policy. Since then, there have been periodic revisions and adjustments to the minimum wage, often accompanied by labour strikes, negotiations, and, sometimes, political manoeuvring. In 2018, amidst growing economic challenges and inflationary pressures, the government signed a new minimum wage bill, raising the minimum wage from ₦18,000 to ₦30,000 monthly. However, many argued that this increment was insufficient to meet the rising cost of living, especially in major urban centres like Lagos and Abuja.

The issue of minimum wage remains a pressing concern for Nigerian workers. Despite the 2019 minimum wage increment, the cost of living continues to rise, exacerbated by inflation, currency devaluation, and economic uncertainties. Many workers find it increasingly difficult to make ends meet, leading to renewed calls for a substantial increase in the minimum wage. The COVID-19 pandemic further exacerbated these challenges, with widespread job losses, salary cuts, and disruptions to economic activities. As the country strives to recover from the impact of the pandemic and dreary inflation, there’s a growing consensus among workers, labour unions, and civil society organisations that a new minimum wage is necessary to address the prevailing economic realities.

According to a report released by the National Bureau of Statistics in 2022, 63% of Nigeria’s population is multidimensionally poor. Among this percentage are recipients of the minimum wage. Minimum wage earners have slowly watched basic amenities slip out of reach because of the currency’s failed purchasing power. Nigeria’s inflation has worsened than in 2023, and the prices of goods have increased by 100% in just a year. Opportunities are bleak for millions of Nigerians, and the lack of an adequate minimum wage presents various consequences. Aside from the apparent hardship suffered, workers within the minimum wage earning bracket may resort to criminal activities to make ends meet. The ability of an increased minimum wage to sufficiently sustain Nigerians’ lives is highly debatable because there is no assurance of economic stability, and soon after an increase, it is likely that clamours will arise again.

In Nigeria, the minimum wage issue has long been contentious and deeply intertwined with the country’s socio-economic fabric and labour relations. As the clamour for a new minimum wage echoes across the nation once again, it’s imperative to delve into the historical context of these demands and explore potential solutions to address the concerns of both workers and employers. Handling the clamours for a new minimum wage in Nigeria requires a multi-faceted approach that balances the interests of workers, employers, and the broader economy. Engagements between labour unions, employers, and government representatives like the ongoing conversation between the government, the Nigeria Labour Congress, Trade Union Congress and private stakeholders are crucial to reaching a consensus on a new minimum wage that reflects economic realities while ensuring the sustainability of businesses. Implementing mechanisms that link the minimum wage to key economic indicators such as inflation, GDP growth, and productivity can help ensure that wage adjustments keep pace with economic fluctuations.