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Implications of N30, 000 Minimum Wage

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ElevateNews takes a look at the implications of the new minimum wage, mostly on State and local governments.

The executives of the Nigeria Labour Congress listened with rapt attention as the Minister of Labour and Employment, Dr. Chris Ngige read out the percentage increase of the minimum wage according to the grade level of civil servants a few day ago.

They could not ask questions and this could suggest that they agreed with the formula. Soon, the Federal Government will begin to implement the N30, 000 minimum wage, possibly starting from December.

However, only a few State governments will be able to pay because they do not have the financial muscle to implement this national minimum wage.

Perhaps, it would have been easy for the States to legislate how much it could pay as minimum wage if the country is truly a federal structure. But in a country that is running a unitary government in the guise of running a federal structure, it becomes so difficult for the other tiers of government to survive.

Only eight out of 36 States can pay this new minimum wage and out of the eight only three can do so without too much pressure and these are Lagos, Akwa Ibom and Rivers State.

The Kaduna State Government has also boasted of being able to pay the N30, 000 minimum wage just like Ekiti, the implication is that the salary may not be regular.

Almost all the States depend on the federal government monthly statutory allocation, which means if they pay the N30, 000 minimum wage, they will not be able to fund other capital projects. The health and education sectors will suffer.

For instance, Lagos can pay more than N30, 000 minimum wage, judging by its N28 billion monthly Internally Generated Revenue (IGR). Ogun State should be able to pay with its about N8 billion IGR monthly but Osun. Zamfara, Ekiti, Kwara, Yobe, Kebbi must not try this or else they are ready to suspend all other projects.

Ordinarily, a federal structure should allow the State to decide its own minimum wage. In this situation where there are federal workers in all States, the new minimum wage will create discrepancies among the three tiers of government, the federal, the State and the local government workers.

It is obvious that some local governments will not be able to pay just like the State governments. These workers go to the same market, they board the same commercial vehicles but in a short time to come, they will be earning different wages even though they are on the same level.

The market women are waiting for the government to perfect the payment. The commercial bus drivers are equally waiting to take their shares. There is going to be a increase in the price of commodities and cost of transportation due to the new minimum wage and this is why the federal government must ensure that the other tiers of the government are carried along.

It is not enough to legislate the minimum wage at the federal level while the States are rendered incapacitated through a unitary system of government.

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