FG, labour tango over wage dispute: Rough road to “yes”

The latest strike embarked upon by the organised labour movement has everything working in its favour. Ordinary Nigerians, the people who feel the pulse of the economy most, are united by the many challenges they face right now. They are hungry and that hunger is not being assuaged by any visible means.

Ironically, this is coming just a few days after we, as a nation, reverted to the former National Anthem. And, true to the proclamation in this Anthem, ordinary Nigerians want to prove that indeed, “Though tribe and Tongue may differ, In brotherhood we stand”. The mass appeal of the strike, from the north to the south, and from the west to east, shows that the trouble in Nigeria is a national one. Hunger knows no tribe. It knows no religion. It knows no location. There is hunger in the city as it is in the village. Nigerians are hungry and the only solution to hunger in the world is food on the table. If a man is hungry, those around him must find a way to help him get food into his body. That is the only language that man’s body will understand.

The current level of hunger in Nigeria is such that mere palliatives cannot address it. This point has been made in this column severally. This is the context in which the demand for a reasonable minimum wage is being pursued. The five-day window given by both parties must therefore be fully utilised for a meaningful conclusion of the matter.

The unions, who represent the rest of us, are acting like a man who has climbed an iroko tree to fetch firewood. And, as the Ibos say in a proverb since you do not climb this tree every day for firewood, once you climb it, you have to collect firewood for today and tomorrow. In other words, try and maximise the opportunity presented to you. In some climes where the welfare of workers is taken seriously, decisions about wages are taken care of by the process of indexation. This involves linking workers’ salary adjustments to changes in key economic indicators, notably inflation.

With that, there will be no need for the kind of cat-and-dog fight over salary adjustments that characterises our wage negotiations. Whenever inflation changes, workers’ remunerations are automatically adjusted, so that you don’t have workers who become worse off as a result of changes in the economy that are not of their making. The reality is that if not for the phenomenon known as inflation, wages could remain fairly unchanged for a long time without workers feeling the impact. But in our economy, where inflation could rise to the current level of 33.69 per cent and things go on as usual, that is why workers can be allowed to remain on the same wage rates.

The truth is that governments have the duty of managing economies in such as that the welfare of citizens is protected.  This is best achieved by ensuring that prices are stable, avoiding situations where you have inexplicable violent disruptions in prices. Governments have delegated this duty to key institutions, chiefly their central banks.

So, NLC and TUC are not just asking for a wage increase for 2024. They are in all probability asking for an adjustment that covers the foreseeable future, till another opportunity comes for them to press for another wage and salary increase. They do not know when next there will be an opportunity for them to sit with the government for wage adjustments. This explains the fact that negotiating is a special skill, and that is perhaps the reason not many can perform this task. Getting to “Yes” in a situation like this is quite risky because by the time you are settling for a “Yes” the correct position could have changed to a “No”.  

The current minimum wage came into effect on April 18, 2019, that is some five years ago. Perhaps they are wondering whether it will take another five years before whatever they get for the ongoing negotiations will be adjusted. The end-of-year inflation rate in 2019 was 11.98 per cent. The difference between the two inflation rates is a measure of how much the average cost of goods and services has increased and how the welfare of consumers has been eroded. Yet someone is still on that same level of wage. Is this possible? This is possible perhaps only in Nigeria, where virtually all things are possible.

Nor do the union members have an idea of what will happen to inflation over the rest of the year and in the future. We know that high inflation is a global phenomenon. But we also know that in some countries, including Nigeria, it is rather too high. Even by historical standards, our inflation has always been high, no matter what other regions are experiencing. In the unique situation we have found ourselves in since June 2023, we are experiencing inflation that has assumed a life of its own, like a self-generating force.

True, the inflationary pressure showed a slowdown in the April report as presented by the National Bureau of Statistics. This was duly acknowledged by the Monetary Policy Committee of the Central Bank of Nigeria in its statement at the end of its meeting on May 21. That slowdown or deceleration of the inflationary pressure informed the decision by the MPC to raise its monetary policy rate by 1.5 percentage points. Even at that, it is not quite clear whether that will be the end of the hawkish stance of the bank.

These are some of the factors that will determine the unions’ move towards a “yes” as they engage with government officials following the suspension of the strike.