TRADE UNION CONGRESS 0 TRADE UNION GONGHESS 0 President: Comrade Festus Osifo Secretary General: Nuhu A. Toro All correspondence should be addressed to the Secretary General = TRADE UNION CONGRESS OF NIGERIA (TUC): POSITION PAPER ON THE URGENT NEED FOR UPWARD REVIEW OF NATIONAL MINIMUM WAGE FROM. 30,000.00 PER MONTH TO 447,000.00 (FOUR HUNDRED AND FORTY- SEVEN THOUSAND NAIRA) PER MONTH. PREAMBLE: The concept of minimum wage is not a novel phenomenon. Historically, it dates back to 1928, the first in the series of conventions held by the International Labour Organization (ILO) towards promoting national minimum wage globally. Subsequent conventions were adopted in 1949, 1951 as well as 1970. National Minimum Wage relates to the lowest amount employers can legally pay employees working in both the Public and Private Sectors in a particular country. Put differently, it is the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or on individual contract. The purpose of minimum wage is to protect workers against undue low pay. They help ensure a just and equitable share of the fruits of progress to all. Minimum wages can also be the element of a policy to overcome poverty and reduce inequality, cluding those between men and women, by positioning the right to equal remuneration for work of equal value. Today, most countries, including Nigeria, have an official national minimum wage. The original purpose of minimum wage as said earlier is to protect employees, by legislation, from exploitation by employers. However, in Nigeriaof today, we urgently need a living wage to protect Nigerian workers not only from employers’ exploitation, but also from economic vicissitudes, for the average worker to be able to live. Therefore, the need for an urgent upward review of the current National minimum wage in Nigeria cannot be overemphasized. The current N30,000 minimum wage in the country has become very unrealistic and inadequate such that workers can no longer meet their basic needs, a scenario that is impacting negatively on their morale and productivity. It will be recalled that the last minimum wage review exercise was done in the year 2019 - about five years ago. Section 3(4) of the National Minimum Wage Act 2019 states that “the national wage agreement expires after five years and it shall be reviewed in line with this Act”. The 2019 minimum wage Act was signed into law by President Muhammadu Buhari on 26" April, 2019, thus will expire by April, 2024. The Organised Labour, comprising the Trade Union Congress of Nigeria (TUC) and the Nigeria Labour Congress (NLC) in collaboration with Civil Society Co: ions, over the years have intensified their call for the upward review of the Nat nal minimum wage. With the setting up and inauguration of the Tripartite Committee to handle the negotiation of a new National Minimum Wage for Nigeria by President Bola Ahmed Tinubu (GCFR). it has become imperative for the process to be fast tracked so as to enable workers breathe a sigh of relief considering the excruciating conditions they are forced to live with daily. JUSTIFICATION FOR A NEW NATIONAL MINIMUM WAGE 1. The Foreign Exchange Rate Volatility and its Attendant Consequences The continuous devaluation of the Naira has resulted the astronomical increases in the prices of almost everything Nigerians consume because our country is highly import-dependent. As at the last minimum wage review in 2019, one Dollar was exchanged for N325.00. aA Dollar now exchanges for over 41,500.00 ~ an increment of almost 500%. This has reflected on the prices of basic goods consumed by Nigerians because as earlier noted — Nigeria is import-dependent for almost all supplies. On the strength of this argument, it has become extremely necessary to review upward the National um wage to a reasonable level to cope with the current economic realities brought to by the volatility in the foreign exchange market. 2. Removal of Fuel Subsidy/Increase in the Prices of Petroleum Products Prior to the National minimum wage review of 2019, petrol was selling for N145 a litre and that price dictated the price levels that were in operation in the country at that period. Immediately the N30,000 minimum wage was implemented, the petrol price was jerked up to N167 per litre. With the total removal of Fuel Subsidy on petroleum in 2023, the price is now way above N600 per litre and prices of almost all the basic needs of life including transportation, accommod: n, food stuff, school fees, utility bills etc. had gone to the roof top. The new price levels have thus made a mincemeat of the minimum wage of N30,000/month. The urgent need for an upward review has therefore According to the recent statistics from the National Bureau of Statistics (NBS), approximately 70 million people are in active labour force. The 2023 data from World Poverty Clock pegged the number of extremely Poor Nigerians at 71 million. This is very dangerous. In addition to that, the NBS says the inflation rate in the Country has risen to about 29 percent (Twenty Nine percent} in January 2024. Food inflation has skipped to over 30 percent. This brutal reality has deepened the poverty level through the erosion of purchasing power of workers. Something substantial must therefore be done urgently to avoidproductivity plummeting to a level that may dash the hope of any economic revival in the next foreseeable future. 4. Continuous Increase in Electricity Tarrif: Electricity tariff has continued to be on increase since the N30,000.00 minimum wage was implemented in the Country. Statistics shows that per unit of electricity as charged by the Distribution Companies (DISCO’s) has increased from N32.50k to over N46.00 which is an increase of 41.5percent. It is important to note that all the DISCO's have filed application for upward review of electricity tariff. As soon as this is implemented, it will further worsen the State of affairs of an average Nigeria worker thus necessitating the need for a living wage to be negotiated and agreed as National minimum wage. 5. Need to Pay a Living Wage: There is no gainsaying the fact that what workers pat ularly those of them in the civil service collect as salary presently cannot in anyway take them home. The fact of the matter is that workers can no longer meet their basic needs. This sorry state of affairs can best be imagined than described. The sum of N30,000 which is currently being paid as the minimum wage has therefore become grossly inadequate. This sum translates to a paltry $20 per month. This figure is ridiculously low. The minimum wage that should be contemplated now should be an amount that can qualify for a living wage. The sum should be able to meet basic needs of accommodation, transportation, feeding, payment of school fees of children, payment of utility bills including other sundry expenses. Taking all these variables into consideration, the sum of #447,000.00 per month which translates to $380 will be very much appropriate as the new minimum wage for the country. The breakdown of the sum is explained in this table:Table 1: Estimated Monthly Expenditure per Household (comprising father, mother and four children) [SN ITEM COST (N) 1 | Accommodation ie 20,000.00/month| 2 Electricity/power 20,000.00/month| Utility | Water 5,000.00/month| Kerosene/Gas 20,000.00/month 3 Food for 6 @ N400/meal 3 meals ,000.00/month per day. [Medical 30,000.00/month| 5 Clothing for family of six per year 20,000.00/month| rorated into months. [Education — 40,000.00/month| Sanitation 10,000.00/month| Transportation @3,000 per day for 66,000.00/month| 22 days Total i tie 8447,000.00 (USD 298) 6. Across Country Comparison Looking at the minimum wage that is in operation in so many African countries, it is discovered that Nigeria has been totally left behind as what we have as National Minimum Wage is nothing but a deceit that is borne to keep an average worker perpetually poor. Out of the eight countries surveyed, Equatorial Guinea has the least amount as minimum wage which is $224 per month. This is way off to that of Nigeria which is $20 per month. The difference in minimum wage in Equatorial Guinea compared to Nigeria is 1.195%. The National minimum wage being asked for through this memorandum i.e. ¥§447,000/month (an equivalent of $380/month) is therefore apt for now.Table 2: Minimum Wage in Nigeria and Selected African Countries as at 2023 With exchange rate at $1 = 81,500 S/N] Country Monthly Minimum Annual Minimum — | ‘Wage (USD) ‘Wage (USD) 1 | Nigeria 20 240 5 2 | Seychelles (456 5,472 3 | Libya 325 3,900 [4 | Morocco Blais a 3,780 5 | Gabon 256 3,072 i 6 | South Africa 242 2,904 7 | Mauritius 240 2,880 = [8 | Equatorial Guinea | 224 2.688 OUR DEMAND In view of all the logical arguments adduced in the proceeding Paragraphs, TUC is demanding the moderate sum of N447,000.00 per month as new National Minimum Wage. This will give igerian workers a minimum level of comfort that will enable them cope with the current biting economic hardship which has turned majority of them to beggars. This is req ed to narrow the widening gap of poverty among the employed, and mitigate the erosion of living standards of Nigerian ers Comrade Nuhu A. Toro, PhD Secretary General