- Advertisement -spot_img
28.2 C
HomePoliticsFashola advocates minimum wage adjustments to compensation for rising cost of living

Fashola advocates minimum wage adjustments to compensation for rising cost of living

- Advertisement -spot_img

With discussions around a new minimum wage gaining traction, former Minister of Works, Babatunde Fashola, has emphasized the need for reasonable income adjustments in Nigeria to address the rising cost of living.

In his piece, “Minimum Wage Review – My Take Away,” Fashola stressed that both low and high-income earners are affected by the increasing costs, necessitating appropriate wage and salary adjustments.

Fashola also criticized Section 4(1)(b) of the National Minimum Wage Act 2019, which exempts establishments with fewer than 25 employees from paying the minimum wage.

He argued that this exemption undermines the purpose of the Act, as small businesses employ a significant portion of the most vulnerable workers. “Who then is the law protecting?” Fashola questioned.

Fashola, a Senior Advocate of Nigeria (SAN), underlined a potential constitutional issue, noting that the National Assembly (NASS) is authorized to legislate on a national minimum wage, not a monthly salary.

He pointed out that wages are typically hourly payments, whereas salaries are fixed amounts paid periodically. According to Fashola, the current law, which mandates a minimum monthly wage of N30,000, may overstep the constitutional boundaries set for NASS.

Fashola called for a nuanced approach to minimum wage implementation, suggesting that a proper formula should be designed to review salaries for those not earning wages.

READ ALSO: Sanwo-Olu signs concession agreement with Interswitch for smart health information platform

He emphasized that such reforms could significantly enhance national productivity, wealth creation, and prosperity.

Amid these discussions, Nigeria is experiencing a deadlock over the new minimum wage. Following weeks of failed negotiations, labour unions declared an indefinite strike on June 3, 2024, disrupting critical services across the country.

The unions argue that the current N30,000 minimum wage is insufficient given the economic challenges, including inflation and the impacts of recent government policies such as the removal of petrol subsidies and forex window unification.

Negotiations have seen labor reducing their initial demand from N615,000 to N494,000, while the government has gradually increased its offer from N48,000 to N62,000.

Despite these efforts, no agreement has been reached, and both sides have submitted reports to President Bola Tinubu, who is expected to make a final decision and present an executive bill to the National Assembly.

In his Democracy Day speech on June 12, 2024, President Tinubu reassured labour unions that a new minimum wage bill would soon be sent to the National Assembly. This assurance comes amid continued dialogue between labour leaders and government representatives, seeking a resolution that balances economic realities with the needs of workers.

The ongoing discussions and potential reforms highlight the critical need for a balanced approach to employee compensation in Nigeria, aiming to ensure economic stability and improved living standards for all workers.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

Join Our Mailing List!

* indicates required
- Advertisement -spot_img
- Advertisement -spot_img
Must Read
Related News
- Advertisement -spot_img