Last week, the media reported organised labour’s threat to resist the removal of minimum wage from the exclusive list by the National Assembly of Nigeria. According to the President of the Medical and Health Workers Union of Nigeria (MHWUN) Dr. Ayuba Wabba, “The organized labour would mobilize Nigerian workers to resist such exploitative tendencies” adding that the “Trade Union Congress (TUC) and Nigerian Labour Congress (NLC) have petitioned President GoodLuck Jonathan on the issue”.
Of course, we appreciate the concerns of the organized Trade Unions for their members on minimum wage, especially when viewed from the backdrop of collective bargain with the States and the Federal Government. Moreover, the ruling class in the country has not helped matters as the cost of the machinery of government at the centre is the same as that of the Federating units with their bloated cabinets and ministries. But the fact of the matter is that the present fiscal arrangement between the federating units and the centre in Nigeria’s federalism is ant-federalist and needs to be addressed for the states to implement any minimum wage.
Indeed, with a revenue formula which gives the Federal Government over half of the country’s income, while states and Local Governments receive approximately a quarter and fifth respectively, implementing the minimum wage certainly is a daunting task for most of the States in Nigeria. With the exception of Lagos and perhaps Rivers and Akwa-Ibom states whose internally generated revenue runs to billions of naira, it is very disturbing to note that the internally generated revenue of most states in Nigeria hardly is enough for the respective state governments to meet their recurrent and capital expenditures. Virtually most states are dependent on the federal government statutory allocation. Only recently the governor of Zamfara State, Abdulaziz Yari, stated that his state last received N3.2 billion from the federation account with an additional sum of N200 million as it’s internally generated revenue, noting that a total sum of over N1.1billion is currently spent monthly on workers’ salaries.
Therefore, we believe that minimum wage for workers should be taken away from the Exclusive List. Indeed, it must be the preserve of the states, depending on the capacity of the respective states to pay their workers. Definitely, the states should be made to control their resources so that, they could fix their workers’ salaries based on what they could generate from their resources.
Perhaps on the issue of minimum wage, the country should have a National guidance, but the states should have flexibility to determine the minimum wage for the respective states. This is what obtains in the United States of America (USA) where minimum wage is fixed at $7.25 dollars per hour, nationwide by the central government but some states and municipalities have set minimum wage level higher than federal level with the highest state minimum wage being $9.15 dollars per hour in Washington DC. The amount is fixed by the various states based on the resources they generated. Together there are 3.6 million workers earning wages at or bellow the minimum of all hourly paid workers.
However, in doing this, the government needs to take into consideration the issue of labour mobility in the country. A fundamental problem of the country’s federal structure is that it has become increasingly difficult for labour migration within the states in Nigeria. For instance, a dissatisfied worker in a particular state of the federation should be able to seek for an improved income in another state. But this is not obtainable in the country as it is even difficult for a worker to get transfer to another State of his or her choice.
Finally, we are of the view that it portends danger in a federal system for all the states to be committed to the same minimum wage irrespective of their revenue base. Unless the present fiscal arrangement between the federal and the federating states is reviewed, it will be difficult for some of the states to pay the Nigerian workers an acceptable minimum wage which would enhance their living conditions.
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