Workers’ welfare: Has labour lost the plot?

Labour Unions in modern day nation states have the prime objective of enhancing and protecting the social and economic welfare of the working class, who invariably constitute, by far, the majority of the population.

Thus,mwhere Labour Unions lack focus, knowledge and unity, the working class maybe left with the short end of the stick by the oligarchs and entrepreneurial class who control the factors of wealth creation in any country.

On the other hand, Labour Unions which are knowledge driven, focused and united would have the capacity to protect the rights of workers and engender equity in resource allocation and may also wield significant political power in a nation’s administration; the United Kingdom’s alternate government, the Labour party is a fine example of the strength of Organised Labour.

Indeed, Trade Unions were also a critical force in the agitation for our nation’s independence from British colonial rule. Regrettably, with the attainment of independence and the later advent of military dictatorship, Labour was deliberately fractionalised and compromised, to become a mere shadow without its former awesome authority; indeed, since the failed campaign for the validation of 1993 elections with the betrayal and eventual capture and incarceration, without trial, of Frank Kokori, who was Secretary General of NUPENG, Organised Labour seems to occasionally find its voice on issues relating to minimum wage levels and the sustenance of the nationally disenabling economic strategy of subsidising fuel prices with billions of dollars annually.

Surprisingly, Organised Labour have inexplicably become mere spectators of unbridled treasury looting, blatant miscarriage of justice and impunity in public administration.

Nonetheless, the question is how successful is Organised Labour in its pursuit of realistic minimum wages and the sustenance of fuel subsidy.  The May-Day speeches of Labour Leaders on Friday, 1st May 2009, for example, were strident on  the demand for a reasonable minimum wage that would give some measure of dignity to the rank and file of Nigerian workers nationwide. In that instance, the Unions demanded that the N7,500 ($50) existing minimum wage be increased to N50,000 ($333)/month. In reality, demands for between 2-20 percent wage increases are not unusual in better managed economies elsewhere, but a demand for almost 600 percent wage increase at a go, would be unusual, as any agreed minimum wage would generally recognise the adverse impact of inflation on the purchasing power of all income earners.

In contrast, despite an abiding annual inflation average of over 6 percent, the N7,500 minimum wage had remained the same for over 10 years,  with the consequent loss of over 60 percent of its purchasing value. It was  therefore not difficult to recognise that workers had become painfully poorer  before a higher minimum wage-level of N18,000 was adopted later in 2010.

Similarly, with average annual inflation rates of over 8 percent since then, the current minimum wage has also lost over 40 percent of its purchasing value; consequently, inspite of systemic bountiful Naira liquidity supply as well as regularly declared foreign exchange surplus in the National Treasury, the lowest paid workers, who constitute the majority of our population have simultaneously become severely impoverished.

The situation of workers would obviously be much worse where some states are unable to pay the N18,000 minimum wage or where government and its agencies sadly owe several months salary arrears; regrettably, there is no overt evidence of Organised Labour’s unyielding robust intervention to remediate the plight of the ordinary worker in such instances.

However, Labour and indeed those Nigerians with a conscience would agree that N50,000 ($400) is probably more appropriate as minimum wage with the severe infrastructural deprivations in our social and economic environment, where a one room abode in a ‘face me I face you’ apartment  may cost as much as N10,000/month. Nonetheless, if some states are incapable of paying N18,000, how does one expect them to pay N50,000; besides, with annual inflation rate still currently hovering around 8 percent, it is unavoidable that over 40 percent of a N50,000 minimum wage would also  be lost to inflation within 5 years  without annual upward wage review!

Furthermore, experience has taught us from the time of the Udoji Salary Review in the mid seventies that such ‘benevolent’ spikes in wage increases will also rapidly drive the rate of inflation. So if nominal wage increases is not the answer, how then can Labour defend the existing purchasing power of its members’ income if it is inappropriate to insistently advocate for significant wage increments to ameliorate the glaring deprivations of the working class?

Indeed, if quantum increases could potentially, also ultimately make the wage earner and the economy worse off, then it is imperative that we consider the relevance of less nominal or indeed static income actually buying more without fuelling inflation; for example, if the N18,000 current minimum wage commands the purchasing value of about $110 at an exchange rate of N160=$1, the same wage rate would command the purchasing value of $220 if the Naira exchange rate is N80=$1.

In other words, the stronger and more stable the Naira, the more enduring would also be the purchasing power of the presently paltry minimum wage, and the better; obviously, it would be for the average worker. The question then is how can we improve the exchange rate and protect the purchasing power of the Naira? It is inappropriate to advocate that a benign rate be adopted by fiat; all that is required is for the Naira to be given a fair chance to determine its own level without the insistent counterproductive interventions by the Central Bank, when it continuously floods the market with fresh Naira values and instigates an embarrassing market surplus to compete against the rationed dollar supplies by the Apex Bank, when it knowingly substitutes fresh Naira values for dollar allocations. But, in reality, are Union leaders sincerely interested in such enduring solutions to the issues of low wages, inflation and workers’ welfare? The answer to this question is out there in the wind!

Similarly, a Naira exchange rate of N80=$1 will immediately also abolish any further payment of wasteful fuel subsidies, so that such erstwhile frittered funds could be more appropriately deployed to remediate our infrastructural deficit so that the masses will enjoy better facilities for education, health, transportation, nutrition, etc.

Indeed, Labour leaders are aware that the economic contradictions, that impoverish our people are instigated by the inexplicable unyielding burden of surplus Naira despite increasing heavy government debt accumulation and an alleged scarcity of funds to grow our economy. Curiously, Labour remained mute even when the immediate past CBN Governor, Lamido Sanusi willfully revealed government’s continuous folly in placing its deposits at zero  percent with banks, only to return thereafter to borrow from the same banks and pay double digit interest rates for money the Apex Bank actually intends to keep as idle funds. Not even Labour, the Peoples’ watchdog wondered how long such frivolity had existed, and why is it still sustained, or indeed, how many trillions of public money had been so blatantly misapplied in the face of deepening poverty nationwide?

Source : Independent

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