The Federal government will present its proposal on Thursday in its current negotiations with Labour Unions over the minimum wage.
Before suspending a potentially crippling nation-wide strike action, Labour had demanded a minimum wage of N50,000 up from the current level of N18,000.
Some political economists will tell you that the minimum wage needs to be raised. Whether the Federal government can afford it is another question. Increased minimum wage will add enormously to an already bloated recurrent expenditure profile. Moreover, increasing the minimum wage may require adjustments of some salaries along the line.
Others would argue that increased minimum wage – though politically desirable – only serves to bring closer the evil day of reckoning. What Nigeria needs is a sound poverty alleviation program – through eliminating serious infrastructural deficits and diversifying the economy. But that takes time which the Federal government does not have.
The major advantage that Labour Unions have in the current negotiation are two-fold. First, a crippling strike action would shut down petrol stations. No fuel would impact disastrously on the travelling public, which includes large trading communities, and shut down the thousands of generators that provide basic power in the absence of reliably public power.
Secondly, critical elections are around the corner and the Federal Government would like to avoid a long drawn-out battle with Labour unions.
