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Adewale Oyerinde: Labour’s N250,000 Minimum Wage Proposal Needs Economic Consideration

Ability to pay and enterprise sustainability are factors to be taken into consideration in deciding minimum wage, says Adewale Oyerinde.

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As the conversation around the minimum wage drags on, the Director General of the Nigerian Employers Consultative Association (NECA), Adewale Oyerinde, has said Labour needs to consider economic dynamics to ensure that the proposed wage is sustainable.

He said this during an interview with ARISE NEWS on Tuesday. 

“The tripartite committee has spent quite a long time discussing, engaging and consulting before we arrived at the figures that we eventually came up with. 62,000 (naira) for the private sector, 62,000 (naira) by the federal government and then on the last lap, labour came up with the 250,000 (naira) figure. 

“Are those figures justified within the context of the realities of each party? I would say yes. We now have to subject those figures to a different dynamic that is beyond all of us. One of them, the economic context, the economic dynamics, because everything basically rests on the economy. Can the economy carry it? Can organised businesses as it currently constitutes, can it carry it? 

“Those are parameters that we can’t run away from. And fortunately for us, the ILO convention just finished about few days ago. And we also had the privilege of speaking to a senior special analyst in the International Labour Organisation that deals with wage remuneration at the global level and we had this holistic conversation about what exactly is happening globally. 

How are these issues normally resolved, which also enriched the conversation that we will be having subsequently? I will not want to delve into the realities of government, I will not want to delve into the 250 (thousand naira) realities of organised labour, but the reality for the organised private sector, because ability to pay is a fundamental part of that issue that we have to take into consideration. 

“Enterprise sustainability is also a fundamental part of those parameters that we have to take into consideration. The state of the economy is also a fundamental part of that parameter and then the needs of workers is also a fundamental part of that conversation. And for me, it’s this and for the organised private sector, it’s this. 

“What should be our objective now that the economy is standing on one leg as some have said? Should we pay a wage that is unsustainable? Do we pay a wage that will also fast track the current challenge of unemployment rate? Those are the critical conversations that we need to have.

“All of us cannot play the ostrich and act as if our brothers and sisters are not losing their jobs. We cannot play the ostrich and behave as if companies are not closing down or reducing their capacity utilisation.”

He also said, “You get to a point where you look at your survival because without enterprise sustainability, we won’t even be talking of jobs. Those are the big realities and those are the things the private sector is taking into consideration, that rather than increase salaries or increase wages to a level that labour is demanding and face the consequences of job losses, we would rather stay within the realm of what is affordable for now and protect jobs and keep our ability to create jobs. Those are the big fundamental issues that we need to address.”

Despite agreeing to the 62,000 naira figure proposed by the government, Oyerinde noted that it was a painful decision for the private sector, bearing in mind the various parameters that need to be considered.

“For us in the private sector, the reality is this, with the current reality that we face, the current challenges that we face, we feel 62,000 (naira) will painfully, and I must re-emphasise that the team of the organised private sector painfully agreed to that 62,000 (naira) based on certain conditions that government will also take into account. It is not as if the private sector is Shylock, it is only driven by profit. No. There are so many parameters that we have to consider before we say for the private sector, a cutting point is 62,000 and in the process now, the tripartite committee has completed its work.”

He added, “It’s very important that Nigerians, all of us, stop sensationalising the issue. The tripartite committee has completed its work. The tripartite committee was set up under convention 131 of the ILO, which specifies the framework for arriving at this conversation. And we have gone through that framework with the guidance of the ILO and the committee has made a recommendation to the president himself. As it was done in 2019, as it was done years before, we make a recommendation to the president who will now either take your recommendation or looking at his own reality. 

“It is out of the hands of the tripartite now. Anybody that is still making issues or raising contentious comments, for us, the matter is now with the president who has the sole responsibility, the constitutional responsibility to announce a figure that will not only promote economic development and that will also meet to a large extent, the needs of everybody, all stakeholders.”

Addressing the suggestion of having different minimum wages for different tiers of government, Oyerinde explained the complexities involved.

“There are two contexts to that issue. First, labour is currently on the exclusives list, that is, it is handled at the national level, so all issues related to labour is within the domain of the federal government. That creates a different dynamic. 

“If it is in the concurrent list now, then we can say each state will handle their minimum wage. Now, the challenge is this, if you leave it at the state level, the potential to protect the most vulnerable worker, which the minimum wage is supposed to protect, that capacity or that ability will be seriously compromised and you have different subnationals coming up with different ridiculous figures. 

 “The minimum wage is the least wage below which nobody must pay. It is not a salary increase, it is not a general salary award, it is not a wage award. It is the minimum for the most vulnerable. The minimum below which your driver should not take. The minimum below which a carpenter most likely should not take. It is the minimum below which nobody should be paid.

 “For now, within the context of our development, I think the national minimum wage still remains relevant so that no state governor, no employer in the private sector, nobody except those that are exempted should pay below. 

“For now, we think a national minimum wage that everybody, below which you cannot pay, should suffice. It reduces the ability for any governor, any private sector employer to manipulate a figure below that.”

Melissa Enoch

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