Labour’s N494,000 wage demand could cripple the Nigerian economy

Business a.m.

The federal government has raised concerns over the potential economic implications of the proposed N494,000 minimum wage demanded by organised labour, comprising the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), stating that the increased expenditure of N9.5 trillion could cripple the nation’s economy.

Mohammed Idris, the minister of information and national orientation, expressed his reservations about the proposed wage increase at a press briefing in Abuja, indicating that it would be a significant fiscal challenge for the government.

Idris asserted that the government had decided to raise the minimum wage from N30,000 to N60,000, reflecting the economic realities in the country. He noted that this was a 100 percent increase that took into account both the interests of workers and the government’s financial constraints. However, the minister expressed dissatisfaction with the organised labour’s demand for a minimum wage increase of 1,547 percent, stating that such a significant hike would not be sustainable and would impose an undue burden on the government’s finances.

According to the minister, the organised labour’s minimum wage demand of N494,000 would not only be detrimental to the government’s finances but also to the country’s economy as a whole. He explained further that if the government were to comply with the proposed wage hike, it would be forced to consider downsizing its workforce, which currently stands at 1.2 million, which would lead to massive job losses, negatively impacting the economy and the livelihoods of millions of Nigerians.

He said: “The sum of N494,000 national minimum wage which Labour is seeking would cumulatively amount to the sum N9.5 trillion bill to the Federal Government of Nigeria.

“Nigerians need to understand that whereas the FG is desirous of ample remuneration for Nigerian workers, what is most critical is that President Bola Ahmed Tinubu will not encourage any action that could lead to massive job loss, especially in the private sector, who may not be able to pay the wage demanded by the Organised Labour.”

Meanwhile, the organised labour announced that a nationwide indefinite strike would commence on Monday, June 3rd, 2024, after negotiations over the proposed minimum wage and electricity tariffs reached a stalemate.

The decision was taken in response to the government’s failure to meet the demands put forward by the labour unions, which sought to address the pressing issues of adequate wages and affordable utility costs for Nigerian workers.

At a joint press briefing in Abuja, the Nigeria Labour Congress and the Trade Union Congress expressed their dismay at the lack of government representation during the critical negotiations.

Both unions stated that the government representatives present at the reconvened meeting were not substantive ministers and, thus, lacked the authority to make any definitive decisions on the proposed minimum wage figure. The unions cited the lack of key government officials at the negotiation meetings as evidence of the government’s apparent disinterest in resolving these pressing economic issues, a point of contention that has been building up over the course of the negotiations.