INTERVIEW: Minimum wage: FG, labour dialogue ‘economics of a farm’ – Ex-presidential candidate, Adebayo.
Amid the raging arguments between the Federal Government and the Organized Labour about the propriety or otherwise of an upward review in the national minimum wage and the appropriate amount, the candidate of the Social Democratic Party, SDP, in the 2023 presidential election, Prince Adewole Adebayo, describes the dialogue as an economics of the farm.
“They are behaving in a micro economic way. They are talking within their industry alone. Both sides have their negotiating tactics. Some of the numbers they are throwing around may appear unrealistic to them. But, my message to them is to let them know that this debate arose not from the adequate wages, but from the problems of purchasing power,” he stated.
In this interview with DAILY POST, he also spoke about the biting fuel crisis in the country, and the way forward, among other issues.
You were quoted to that have said that minimum wage in a regime of maximum cost of living and no minimum guarantee of social safety net in galloping inflation, is a pantomime of self deceit; a reality show in which neither the government negotiators nor the labour leaders negotiating wages live on their own official wages. What do you mean by that statement?
In economics, the dialogue between the labour unions and the government with regard to increase in workers’ wages is simply economics of a farm. They are behaving in a micro economic way. They are talking within their industry alone. Both sides have their negotiating tactics. Some of the numbers they are throwing around may appear unrealistic to them.
But my message to them is to let them know that this debate arose not from the adequate wages, but from the problems of purchasing power. When you listen to the president of Trade union Congress, TUC, Mr Osifo, and all the comparatives he was giving, even though he was talking about micro economics in terms of what his members need to get from their employers, you will understand that they are not talking about the overall economy.
What is causing price instability for them is the purchasing power of the Naira. There are two ways to help the purchasing power of the Naira. One, you can stabilise the currency itself. This will help you to kill hyper-inflation and inflation so that the Naira, from January to December, can maintain its purchasing power.
The second thing you can do is to come from the welfaristic point of view to realise what the workers are worried about. What exactly do they spend their money on?
If the average worker has access to housing, say at seven percent of his salary, has access to medical care at five percent of his salary, has access to education of four to five children at six percent of his salary and now deal only with food and issue of transportation by virtue of you having employment, you have access card which I grew up to know in Lagos State during the late Lateef Jakande administration, that is Lagos State Transport Corporation, LSTC.
So, if you have all these things packaged, say 25 percent to 35 percent of your salary, then, you won’t worry too much about this argument of figures. If you have a million workers out of over 200 million people, or if 37 governments will need up to a million workers to run their services, you will be spending N615 billion every month, meaning that in a year, you will be spending about N8 trillion just paying minimum wages; it doesn’t make any sense.
Now, if they cut it by half, it still doesn’t make any sense. If they cut it by one-third, one-quarter, it still makes no sense. At the end of the day, let’s say there is a magical space where you are just printing money, the way N615,000 sounds today is not the way it will sound in four years. Mr. Osifo or his successor will come back to say N615,000 is a joke. It can’t take us anywhere.
So, the intervention we are making is that you are solving the problem at the pricing of labour. You cannot solve the problem there because it is too narrow a space. Where you can solve the problem is the amount of social investments you need to make in the economy, such that the employed, the semi employed and the unemployed, who are either skilled, highly skilled or low skilled, will have a minimum floor below which you cannot fall.
Talking about the social security investments, the Tinubu administration said it has started to re-engineer the social security and welfare of the people. Do you think the government has started on a good path?
We don’t have the same ideology, but they are throwing money on non-existent products; that is where I have disagreement with them.
Whether you pay salary, allowance or grants, as we did during the Udoji Award, when people were given loans and all that. Remember that during the Udoji award, once people got it, they ran to UTC to buy bicycles, and the price of bicycles skyrocketed.
Meanwhile, in China, if you join the civil service, they will not give you any Udoji Award; they will give you bicycles because the bicycles come with the job. If you were in the colonial government and you were an assistant district officer, school officer, health officer, forest rangers, or PWD, all these things were tools. When you were getting the job, they would direct you to the staff quarters, and tell you that this is the school your child should go to.
So, how do you guarantee those basic supplies like education, shelter, and healthcare because these are basic needs that people scamper to get?
We have to organise our politics and government around them. What we are doing now is that we are organising our politics and government around sharing money. In Abuja, the states come to share, and the local governments under the Association of Local Governments of Nigeria (ALGON) come to share. The TUC and the Nigeria Labour Congress (NLC) also came to collect their own share. It is still the principle of sharing money, not sharing value or creating anything.
Remember, if you are talking about stakeholders in the country, labour is superior and senior to the government of the day. I can be president tomorrow, and still meet labour there, because it is permanent and the social services, including everything you want to run to make life easy for labour is to be done by labour members themselves.
If this government is to start on a note that is sustainable, what would you say is the best and practical step to take?
The best steps are social investments. First, stop worrying about who is a worker or who is not. They have to first look at Chapter 2 of the constitution and say if by virtue of that section of the constitution which gives them the mandate to govern Nigeria, they have been able to fulfil the promises inside the constitution? What is the minimum that Nigerians should expect from the government, and do we have the resources to put them there?
By that, you now know that you need new hospital beds and new roads. During the second Republic, all the governors understood these social investment elements, and that is why all the state governments had their own school boards, scholarship boards, and water resources, such that water gets to houses even in rural areas. What we are doing now is monetary government where we share money and we assume that there is availability.
For example, Mr. Osifo, who is an important person in Nigerian leadership, is assuming that because you are collecting three times more money in FAAC now than in 2019, that there is availability, not knowing that seven times the cost now is not up to what you were collecting before. This is the illusion of money because it is not the amount of money you collect that matters, but the purchasing power of the money and the allocative efficiency in economics.
So, you will see that a state in the North with 20 percent of revenue of the states in the Niger-Delta is making more progress because its allocative efficiency is better, while the other state may be spending its own money on politics and things like that.
Are you saying the social investments must come as a package at the point of employment?
The way our constitution is crafted, it is not related to your job. It is related to your being a citizen. While I was growing up, I schooled in Lagos and Ondo under Jakande and Ajasin. I was too young to be employed by anybody. I was about five years old in primary school, and as such, I was not employable, but the government was interested before we started class whether I had eaten or not. When we got to school, the first thing they would give us was bread, beans, and milk. When they were chasing you around in primary school to give you that inoculation, it wasn’t that you were going to be employed by them, it was required that the government made sure you were not blind or crippled.
For over one week now, Nigerians have battled with fuel scarcity; a development that has worsened the socio-economic situation of many households in Nigeria. If you were President Tinubu, what would you be doing to address the fuel crisis at the moment?
What I will do is to broaden the philosophy. Don’t follow the party manifesto. Follow the constitution. Know that if you want to be president, you must follow Chapter 2 of the constitution. If we follow that, Nigeria will be a different country.
