The Conundrum between National Minimum Wage and President Tinubu Promised Living Wage

Mohammed Jibril PhD
Department of Accounting
Federal University of Lafia
Email: jibril.mohammed@ms.fulafia.edu.ng

The national minimum wage in Nigeria is reviewed after every five years. The last minimum wage was signed into law on 18th of April 2019. That means it is over five years, since the last minimum wage was reviewed.

The new minimum wage is expected to have taken effect from the 1st of May, 2024. The Federal Government constituted a committee made up of the organized labour and other stakeholders to come up with a new minimum wage.

These committee was given a whooping sum of 1 billion naira. Six months after the constitutions of the committee they are yet to agree on a new minimum wage.

Why the government representatives are proposing a meagre amount of 60,000 after starting with 45,000 the NLC is insisting on 487,000. Prior to the constitution of a minimum wage committee, the president during his campaign and in many fora have promised that he will rather pay the least Nigerian worker a living wage instead of a minimum wage.

Unfortunately, one year into his administration neither the minimum wage nor the living wage has been paid. Let's dissect the difference between a minimum wage and a living wage in today's Nigeria.

A minimum wage is the least amount of money any worker should earn in Nigeria backed by law, which today stand at 30,000 per month, while a living wage is the amount an individual or family would need to earn to avoid living in poverty. The living wage is usually higher than the minimum wage.

Let's calculate a conservative living wage in today's Nigeria, using six parameters

1. Feeding

2. Transportation,

3. Utility bills

4. Education

5. House rent,

6. Hospital bills.

7. Emergency

1. For feeding alone, a family of five, comprising a man, his wife and three children on 500, per meal, per day, will amount to 225,000 per month. This calculation is very conservative, because in today's Nigeria 500 per meal is not sufficient enough.

2. Transportation for 22 working days at 2,000 per day will amount to 44,000 in a month.

3. Education. If three of your kids are attending the cheapest private school around your neighborhood, since public schools have been bastardized, the least you pay per term for the three of them will be 90,000 per term. If you multiple that by 3 terms in a year that will give you 270,000 then divide it by 12 which will 22,500 per month.

This is based on the assumption that you don't have any child at the tertiary institution.

4. On utility bills. Let's consider only water and light. The least you pay for electricity for that size of family should be 10,000 per month. Let's also put water conservatively at 10,000 per month.

 5. If you leave in a rented apartment, the least you can pay for a one bedroom flat in the suburbs of any big cities in Nigeria could be 300,000 per annum. If you divide that by 12, it will give you 25,000 per month.

6. With a minimum of 10,000 monthly for hospital bills and 10,000 for other emergency, if you put all these together, a conservative living wage in today's Nigeria for a family of five will amount to 356,500 monthly, compared to the miserable 60,000 been proposed by the F.G.

If the Tinubu administration actually want to pay a conservative living wage, then the least a Nigeria worker should take  home should not be less than 356,500 monthly. However, it seems the talk about living wage was just a political gimmick which was never meant to be implemented.

The least the government should proposed as a minimum wage if it can not pay a living wage should be between 120,000 to 150,000 since the prices of goods and services has skyrocketed by over 300% from when the last national minimum wage was paid and now.

The 60,000 been proposed by the government is a huge joke. The government is just trying to test a failed hypothesis with that miserable amount.

The government should be realistic and come up with minimum wage that will reflect our current economic reality, since it is obvious they can not pay a living wage.

The president should as a matter of urgency, let Nigerians know that he has no intention of paying a living wage, but will rather pay a minimum wage that can cushion the effects of some of his policies on the Nigerian masses

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