Minimum Wage: Utomi Advises FG, Organised Labour

June 7, 2024

A renowned political economist, Prof. Pat Utomi, says Federal Government and the Organised Labour should take advantage of the new minimum wage negotiation to move Nigeria down the path of thrift and production.

Utomi, founder, Centre for Values in Leadership (CVL) and 2007 presidential candidate of the African Democratic Congress (ADC) advised in an interview with the News Agency of Nigeria (NAN) on Friday in Lagos.

He was reacting to the impasse between organised labour and the Federal Government on the new minimum wage for workers which led to the strike declared by labour unions on Monday.

Utomi said: “Labour must insist on a dramatic slash in the cost of government and investment of the savings made in production programmes and infrastructure.

“This is to facilitate and sustain the value chain of the output based on our latent comparative advantage from strong factor endowments.

“On its part, the government should establish what it is paying for. Is it paying as welfare for people who just show up?

“Output targets need to be established and hard consequences for abuse of positions like corruption and begging on the job from customers.”.

He said that benchmark for civil society monitoring of both parties also needed to be established with clearly outlined consequences.

According to him, the government needed to also come up with bold initiatives that drove the transition to production in the way the Operation Feed the Nation (OFN) attempted to do in the mid 1970s.

Utomi said that future adjustments of minimum wage weighed heavily on productivity improvements.

“Once a proper framework is established now the template to plug in productivity gains should be activated.

“It should not be a matter of sentiment or mood of the leaders on both sides,” he added.

It would be recalled that the organised labour’s declaration of nationwide indefinite strike on Monday over the new minimum wage affected all sectors of the economy.

However, with Federal Government’s expression of commitment to raising its proposed minimum wage of N60,000 at a meeting with labour leaders, the organised labour on Tuesday announced suspension of the industrial action for a week for further negotiation.

The government and the organised private sector had initially proposed N48,000, then N54,000 and N57,000, which were all rejected by labour.

The organised labour had also proposed N615,000 as new minimum wage, but later reduced it to N497,000 and then to N494,000, to reflect the prevailing economic realties.