On the eve of pivotal elections the current clamour by the Labour Congress for a review, undoubtedly upward of the national minimum wage must be treated with due care and circumspection. Ominously, the demand also comes at a period of falling oil prices. The federal government, in view of the daunting reality has ruled out further borrowing and is said to be mulling over contingency plans.
Undoubtedly, in view of the dwindling allocations from the centre in a quasi federalism – the ability of the states to cope with their present commitments is open to question. This is why the issue of federalism has to be looked at. The states do not have the same earning power or internally generated revenue (IGR). This means that the concept of a nationally implemented minimum wage is untenable. Even in the developed world, we have entrenched mechanisms such as the United Kingdom’s ‘London weighting allowance’ for those working in London.
In today’s economic condition even a N100,000 a month minimum wage will be clearly inadequate for a nuclear family of four. What has to be done now is to shift the priority towards purchasing power parity through a living wage. Inflation inducing monetary benefits never have a lasting beneficial effect. What we need are social safety nets.
There must be widened access to refurbished health, education, social services systems and crucially the provision of affordable housing. It is at the end of the day the real value of the naira in our pockets that counts. Therefore, there must be a reduction in the costs of the machinery of government so that savings can be re- directed to build the vitally needed social safety nets.