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Minimum and Maximum Wages and the Poverty Line

July 18, 2011

Eighteen thousand naira a month, or N600 a day, for one citizen working in the public service. What can N600 buy him or her in the market today? On a lucky day, perhaps a sizable fish or tuber of yam. Fifteen million naira and N14 million, or N500,000 and N467,000 a day, for another citizen, working in the same public service, this citizen being a senator or representative of the people. What can N500,000 buy him or her? Ah, come on, you say! I have based my calculations on the figures given in the report, “Legislators’ Pay as Burden on Economy” in The Guardian of 19 June 2011.

Eighteen thousand naira a month, or N600 a day, for one citizen working in the public service. What can N600 buy him or her in the market today? On a lucky day, perhaps a sizable fish or tuber of yam. Fifteen million naira and N14 million, or N500,000 and N467,000 a day, for another citizen, working in the same public service, this citizen being a senator or representative of the people. What can N500,000 buy him or her? Ah, come on, you say! I have based my calculations on the figures given in the report, “Legislators’ Pay as Burden on Economy” in The Guardian of 19 June 2011.

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  They may not be exact, and there are other figures, some higher and some lower, that have been bandied about since the mind-boggling scandal of the looting of the treasury, legalised as legislators’ salaries and allowances, began to get due attention.

Although the members of the National Assembly have received, almost exclusively, withering criticism of their greed and venality, it is obvious that they merely symbolise the national malaise that has kicked the country into the gutter. This orgy of looting, of “authority stealing” — as Fela memorably puts it — is replicated to near-equal degree and ferocity in every state house of assembly as well as in the federal and state executive cabinets. Where the legislators make laws or adopt resolutions to legitimise their highway robbery, the executives do it mostly by way of bogus or inflated contracts to themselves or their partners in crime. And the ruses for graft know no bounds. The world might wonder, for instance, what it is about furniture and cars in Nigeria that makes it necessary to replace them every year; but then, the world has long stopped wondering about us.

While we wait to see if the new class of senators and representatives will do the only honourable thing this scandal demands, which is to introduce a bill on the appropriate and just remuneration of all public servants, a few questions beg answers. Such as, What are the parameters for determining a minimum wage? And what logic led the Nigeria Labour Congress to accept a minimum wage of N18,000 as deserving or realistic and as the most the Federal and State governments could possibly pay?

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I propose three commonsense considerations, with primary reference to the public sector where labour is tinged with the unquantifiable elements of duty and service. In the private sector, the matter would appear more straightforward, with economists harping on productivity, the proverbial supply and demand and the bottom line, while workers stress equitable remuneration relative to the surplus value they produce but which the owners of capital arrogate to themselves.

In either case, however, the first consideration ought to be the prevailing cost of living. A worker’s wage ought to secure the basic necessities of food, shelter and clothing, and the near-equal necessities of health, children’s school fees (to the extent applicable) and leisure. The assurance of these things guarantees that the worker will be sound in body and mind and so able to offer optimum productivity and replenish the labour force. In other words, the State must guarantee a minimum quality of life with the minimum wage. No citizen, let alone one employed by the state, should live below the poverty line.

The second factor is more practical: the actual capacity of the employer to pay. In strict economic terms, this capacity would depend on productivity and the bottom line. But this factor is highly mitigated in the public service where civic duty, and not a commodity to be sold at a higher price than the cost of its production, is required of the worker. In the public service, then, the most important consideration is the cost of living as a base, adjusted to take care of the level of responsibility, the training and experience required for the job, and prestige of office, this last being inseparable from training and responsibility.

But neither the legislators’ self-awarded emoluments nor those approved by the Revenue Mobilization, Allocation and Fiscal Commission seem to take cognizance of any justifiable principle. RMAFC would have a senator and a representative hauling home a yearly fortune of N8.2 million  and N6.4 million respectively. Which translates to about N22,485 and N17,405 a day. Making them earn more (or the same amount) in a day than the minimum wage public servant would earn in a month!

And this brings me to the third principle, which I frame in the form of a question: What, in the interest of social harmony, is the tolerable discrepancy between the highest and lowest paid public servant that a responsible government would allow? Please mark the phrases, “the interest of social harmony” and “a responsible government.” At present, a chasm as wide as an ocean separates the least paid and the highest paid public servants. Need it be said that a government unmindful of such a corrosive divide creates by its own hands the conditions of lingering social unrest?

On a concluding note, it seems to me a scandal as well that the NLC has yet to mobilize workers to picket the national and state assemblies daily to force the honourable and distinguished legislators to give up their loot. NLC and the Nigerian people in general ought to be asking why a senator should earn over eight hundred times more than the minimum paid worker. And how much might the state and federal governments be able to pay as a living minimum wage if they lavished only a third, even half, of what is currently amassed for the top echelons of the bureaucracy? Or if we were to make a genuine effort at plugging the bottomless hole of corruption? Why would one of the poorest nations on earth be the one whose public service manufactures instant millionaires? Why are we bent on reversing the age-old wisdom that one goes to the private sector to make money and the public sector to render service?  And just why aren’t the masses in the streets to insist that the agent, the delegate, cannot enjoy a higher status than his or her principal? For if the Nigerian people are the collective principal, with a per capita income of $2,748 —  according to World Bank figures for 2010 — how on earth can its agents be allowed to receive and keep a yearly emolument of $1.2 million and $1.12 million?

The NLC has threatened, and by the time this is published, may have begun a strike to “defend ... the fundamental human right of the Nigerian populace to live above poverty line.” But it is beyond doubt that a single person, let alone a family of six (which ought to be the standard unit), cannot hope to live above the poverty line with N18,000 a month or N600 a day. NLC president, Abdulwahed Omar, would be better off calling for a clear determination of the poverty line, and then a renegotiation of the minimum wage. A very conservative guess might put this at N70,000. 

It is obvious that Nigeria can pay it, if it can afford to pay a single senator N15 million a month, and — by Professor Sagay’s calculation —N453.3 billion a year to legislators in the three tiers of government alone. If we include the figure for federal, state and local executives, and what is lost to corruption and waste, the treasury would be replenished by close to a trillion naira a year. Imagine that! Judiciously used, the Nigerian worker would then enjoy a minimum wage above the poverty line.
 
Ifowodo teaches poetry and literature at Texas State University in the United States.

© Ogaga Ifowodo

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