Labor’s wage demand could cost FG over N11 trillion annually.
Organized labor’s push for a 20-fold increase in the minimum wage could nearly double the federal government’s wage bill, soaring to over N11 trillion annually. This proposed minimum wage hike, from N30,000 to N615,000, is based on calculations of workers’ monthly living expenses, with food and transportation being significant factors. While the government has proposed N48,000, labor unions are adamant about N615,000, even issuing ultimatums to states yet to implement the N30,000 wage. Analysts suggest that while a pay raise is warranted due to rising living costs, the proposed amount may be unfeasible.
The International Monetary Fund (IMF) warns that the negotiated wage could surpass the budgeted amount, possibly necessitating a supplementary budget. Some argue that instead of a minimum wage, a living wage is more effective in combating poverty, proposing a range of N100,000–N120,000 monthly.
Comparisons with other countries reveal that Nigerian workers receive significantly lower wages relative to their peers in countries like Turkey, Mexico, and South Africa. Adeola Adenikinju, president of the Nigerian Economic Society, stresses the importance of objective criteria such as the cost of living, inflation, productivity, and government affordability in determining a new minimum wage.
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