Wages And What It Means To Workers

Wages and salaries typically include remuneration such as paid vacations and sick leave.

It also often includes supplementary benefits such as pensions, health insurance and sometimes home and car allowance sponsored by the employer. Additionally compensation can be paid in the form of quarterly or yearly bonuses or stock options, many of which are linked to individual, group or company performance.

Some Categorisations Of Wages.

Subsistence Wage - the wage which is just sufficient to meet the necessities of life i.e. the lowest wage upon which a worker and his or her family can survive.

Living Wage - the minimum wage a worker or family needs to meet their basic needs — sometimes confused with subsistence wage, which is basically the lowest wage required to stay alive.

Minimum Wage - the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract.

The categories above can be arranged by virtue of size in the order: Living Wage greater than (>) Minimum Wage greater than (>) Subsistence Wage.

Brief History Of Nigerian Minimum Wage.

Nigeria does not have a Living Wage Act. We do however have a Minimum Wage Act.

Pre 1975 there wasn't a defined or structured minimum wage agreement in which labour representatives for the workers and the government sat down together, discussed and agreed a wage floor that will apply to workers. Nevertheless the oil boom of the 70's did herald in an uplift of wages by the government for workers through the famous Udoji Package of 1975.

Post 1975 efforts began being made by both labour representatives for workers and the government to establish a minimum wage for workers and over the years a structure to minimum wage negotiations began to evolve. This has led to a rise in the minimum wage of workers over the years as follows:

1981 - ₦125 per month pay package.

1989/90 - ₦250 national minimum wage.

1999/00 - Wages were successfully increased to ₦3,000 i.e. ₦3,000 for state workers and ₦3,500 for their federal counterparts.

2004 - ₦5,500 for state workers and ₦7,500 for federal workers was agreed.

2011 - ₦18,000 minimum wage was achieved.

2019 - ₦30,000 new national minimum wage for Nigerian workers.

It is worthy to note that, within the last year, at least a couple of states have indicated an increase to the wages for their state government workers. Also at the federal level there are indications that the process to review the Minimum Wage Act would commence and be due in 2024 with the aim of an upward revision, in fact just today news came out that the government has approved a pay rise for civil servants although the percentage used is yet to be approved, nevertheless the 2019 Minimum Wage Act is what is currently applicable to Nigerian workers.

Minimum Wage vs. Living Wage.

The Minimum Wage is a national legally binding obligation on employers which often makes no reference to a living standard. Living Wage, on the other hand, describes the adequate living standard and takes that into account.

In a world currently beset with high inflation from the after effects of COVID-19, the Russia-Ukraine war and our own local environmental characteristics it is apt that the common theme of the many living wage campaigns currently taking place all over the world is to lift Minimum Wages levels to those of the Living Wages.

Based on data obtained from tradingeconomics.com, the Living Wage Individual in Nigeria increased to 43200 NGN/Month in 2018 from 41800 NGN/Month in 2015.  

If the parameters used to obtain these figures are adjusted for today it is fair to assume that they will increase again.