• Consideration of prices of essential items pushes appropriate wage peg to near N200,000• Prioritise advocacy for good governance, says Uba
But since essential items, which the low-income earners consume, rise faster than other goods in a high inflationary economy like Nigeria, minimum wage earners will need much more than a 200 per cent upward salary review to prevent them from falling to a lower poverty level than they were five years ago.
Beyond the complexity of essential consumption bundle analysis, key consumer or standard of living measurement variables show that N30,000 today has lost nearly 70 per cent of its value when compared with what it was five years ago. Whereas fuel increase and naira depreciation, which the organised labour have used to rationalise what many have dismissed as “unrealistic demand”, feed into price changes, the magnitude of their change in the intervening years is different from the inflation rate.
The price-adjusted minimum is nearly 70 per cent above the N62,000 offered by the government. But the wage peg would need to be raised by over 100 per cent to meet the N250,000 labour unions have demanded. In the private sector, there is a growing fear that an outrageous wage review would worsen the crisis and increase the cost of production in two ways – a higher wage bill and the cost of borrowing. In theory, wage increase increases aggregate demand, which in turn pushes up the inflation rate except if the output level remains unchanged.
The organised labour, comprising the Nigeria Labour Congress and the Trade Union Congress of Nigeria , at the last meeting of the tripartite committee, which had concluded and submitted its report to the Federal Government and waiting for President Bola Tinubu’s approval, insisted on N250,000 as the new minimum wage for Nigeria workers.
Yusuf lamented that in the private sector, there are those in the small and medium enterprises that are struggling to stay afloat. A finance and public sector economist, Dr Uba Chiwuike, agreed that there should be an increase in workers’ wages, but advised that planned increments should align with the level of productivity.