Written by Workers' Alternative Sunday, 29 March 2009 11:37
Organized labour in Nigeria has presented a demand for a N52,000 minimum wage to the government. This has obviously generated a lot of heat from all quarters. The bourgeois intellectuals have come in their multitude to explain to and confuse the public that this demand is not only unrealistic, but that it is also highly detrimental to the proper functioning of the fragile Nigerian economy. It would lead to inflation and worsen the unemployment figures, so they claim. It is imperative that we highlight their claims and puncture their unintelligent analysis. This article is aimed at doing justice to this.
Is the demand justified?
Nigeria earns on average over US$40 billion per year from oil alone. During the last oil boom, the country hit a fortune of N7.6 trillion from oil in just 10 months. The N7.6 trillion is a 210% increase on the N3.606 trillion originally estimated for the whole year. This explains why political office holders have been able to increase their own wages and allowances by over 800%.
The IMF recently found that 85% of oil income goes to a meagre 1% of the population. Nigeria’s wealth per adult is $813, compared to America’s $201,319, but it is distributed among only 1.4% of Nigeria’s population, with an adult population as high as 54% of Nigeria’s total population. Nigeria earns more than enough to pay even more than the N52,000 minimum wage, but gross inequality, and callous and inhuman distribution of national wealth have always been huge obstacles.
Nigeria like all under-developed countries is an import-dependent nation and the foreign exchange rate plays a very significant role in its economy. In 1996 the exchange rate was 21.9 Naira to the dollar; later rising to 92.3 Naira to the dollar and presently it is as high as 145 Naira to the dollar. This has a direct impact on the rate of inflation which has significantly increased in the past period. Due to the effect of inflation, per capita GDP today remains lower than in 1960 when Nigeria declared independence. Between 1970 and 2000 in Nigeria, the number of people subsisting on less than one dollar per day grew from 36% to more than 70%, from 19million to 90million people.
From the reasons given by the government in explaining the need to increase the salaries for all political office holders, it is obvious that they themselves know how difficult it is to survive under these very difficult economic conditions. According to reports in the Nigerian media, a document on Remuneration Packages by the RMAFC for Political, Public and Judicial Office Holders in Nigeria stated that the review was a function of changes in the basic fundamentals of the Nigerian economy, external reserves, Gross Domestic Product (GDP), growth rate, rate of inflation and the need for a living wage. But when it is the turn of ordinary workers, they are very quick to state that they are asking for unrealistic demands.
Would the increase in workers’ wages really lead to galloping inflation?
Inflation can be described as a decline in the real value of money – a loss of purchasing power in the medium of exchange which is also the monetary unit of account. Therefore, what necessitates in the first instance, the need to increase wages is the increase in the rate of inflation and not vice versa. This explains why we always advocate that wage increase should be tied to the rate of inflation. The senseless bourgeois intellectuals who are linking the increase in the salary of workers to general inflation are only trying to cover up the obvious.
How can these gentlemen explain the fact that between 1982 and 1988 there was a wage freeze in Nigeria – suffice to say that in 1985 there was even an official wage cut – and this was the period that witnessed one of the highest rates of inflation of 25%? Despite the present miserable 5,200 Naira minimum wage, why do we have such a high rate of inflation of 19.5%? The present wage demand is therefore absolutely justified and would only redistribute the already existing wealth. It would put some extra purchasing power in the hands of the workers. How can that be negative for the economy? At the root of the present crisis is the fact that there is an impoverished majority of poor along with an extremely small minority of very rich.
Connect struggle for wage increases to the struggle against unemployment
The Nigerian workers need to be reminded of the fact that when a struggle for a salary increase is waged, especially during recession as we are in now, the ruling class to maintain its profit levels resorts to mass sacking and an intensification of labour exploitation. How they reacted in the 1980s should always ring in our head. Then, they passed laws freezing the workers’ salary. They reduced the federal and state labour force by almost half.
They will do this again this time unless the leadership of the Nigeria workers takes proactive initiative before them. The ruling class has no other option under capitalism than to further pauperise the Nigerian workers and the poor masses. The first step towards preventing the ruling class from carrying out this obnoxious step is to link the present struggle with a struggle against unemployment.
Unemployment levels in Nigeria are already among the highest in the world, with youth unemployment at 60%, university graduates constituting 25% of total unemployment and with the formal sector only generating 7% of employment for all those in the labour force.The success of the present wage struggle is intimately linked to our successful struggle against unemployment in Nigeria, it is only along this line that the ruling class can be stopped from taking the only option open to them, which is mass sackings.
Only a workers’ government can really guarantee a living wage to Nigerian workers
In the long run, no matter the level of minimum wage conceded by the Nigerian ruling class, as long capitalism still remains and power is still firmly in the hands of the present capitalist class, they will always find ways of taking back whatever we win. They will raise all sorts of taxes, they can scrape back whatever they give us through higher levels of inflation, and they will find millions of reason to sack more workers.
What can make the gain of wage increase permanent is for the Nigerian workers to take power from the present crop of degenerate, inept and extremely corrupt ruling class who are the defenders of this senile, barbaric and blood-thirsty capitalist system.
Forward to a Nigerian Workers’ Government!