May Day: Tears for workers amid COVID-19

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Today’s Workers’ Day celebration will witness no mass gathering, glamour or fanfare. No thanks to the coronavirus pandemic. TOBA AGBOOLA and FRANK IKPEFAN examine the plight of Nigerian workers amid COVID-19

For the first time in about a century, workers around the world will not celebrate May Day on the streets. No thanks to the COVID-19 pandemic. Aside from stopping their parade, the pandemic has also endangered them. Millions of jobs are believed to have been lost since the pandemic began its onslaught on the human race. Many workers have either not been paid for last month or have had to accept a pay cut.

In Nigeria, the minimum wage, which workers fought tooth and nail to get the government to accept, is under threat. Nigeria Labour Congress (NLC) President Ayuba Wabba and the Trade Union Congress (TUC) President Quadri Olaleye are spoiling for war to protect workers’ interests despite the pandemic.

Already, some organisations have begun taking measures which may likely affect workers’ salaries. For example, workers in the aviation sector have been asked to take a pay cut against their wish.

In Kaduna, Governor Nasir El- Rufai has directed that all workers in the state take 25 per cent pay cut. The cut affects both civil servants in the state and political officeholders. Organised Labour has rejected the decision. Labour says the decision of the governor to cut salaries of workers is against the tripartite agreement.

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Other state governors are yet to decide or announce their next line of action as regards workers in their state. Even before the outbreak of the pandemic, some state governors were finding it difficult to implement the N30, 000 minimum wage signed into law last year by President Muhammadu Buhari.

But for the pandemic, Nigerian workers would have had cause to celebrate the victory of the N30,000 minimum wage which took them over two years to win and not minding the fact that the battle is still ongoing at the state level.

Job loss/pay cut

The International Labour Organisation (ILO) last week alerted that continued sharp decline in working hours globally due to the COVID-19 outbreak means that 1.6 billion workers in the informal economy – that is nearly half of the global workforce – stand in immediate danger of having their livelihoods destroyed.

The latest ILO data on the labour market impact of the COVID-19 pandemic reveals the devastating effect on workers in the informal economy and on hundreds of millions of enterprises worldwide.

Compared to pre-crisis levels (Q4 2019), a 10.5 per cent deterioration is now expected, equivalent to 305 million full-time jobs. The previous estimate was for a 6.7 per cent drop, equivalent to 195 million full-time workers.

The ILO said more than 436 million enterprises face high risks of serious disruption, saying that these enterprises are operating in the hardest-hit economic sectors, including some 232 million in wholesale and retail, 111 million in manufacturing, 51 million in accommodation and food services, and 42 million in real estate and other business activities.

“As the pandemic and the jobs crisis evolve, the need to protect the most vulnerable becomes even more urgent.

“For millions of workers, no income means no food, no security and no future. Millions of businesses around the world are barely breathing. They have no savings or access to credit. These are the real faces of the world of work. If we don’t help them now, these enterprises will simply perish,” said ILO Director-General Guy Ryder.

Already at home, several jobs are being threatened. Another round of battle looms between organised labour and employers of labour, especially state governors in the country.

The NLC has directed its affiliates and state councils to resist any salary deduction on the account of COVID-19. Instead, labour urged employers to show solidarity by ensuring job protection for workers as the country continues to battle the spread of coronavirus.

Organised Labour’s view

According to NLC, this critical period of coronavirus pandemic was not the time for employers of labour to stop workers’ salaries or enforce pay cut.

It noted that the stoppage of salaries or enforcement of pay cut at this time would be both illogical and illegal as workers’ salaries are core elements of employment contracts and collective bargaining agreements.

Wabba said: “In reciprocation of the enormous sacrifice made by workers, we urge employers of labour to show solidarity with the sacrifice of our workers and people by ensuring wage protection, income support and social inclusion at these trying times.

“This is not the time to stop or deduct from workers’ salaries. Such an action would be both illogical and illegal as workers’ salaries are core elements of employment contracts and collective bargaining agreements. We have asked our affiliates and state councils to resist any salary deduction on the account of Covid-19.

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“We reassure our workers that our priority in these trying times remains the cautious, gradual, evidence-led and smart restart of the economy so that our workers can go back to work. We are also completely committed to the recovery of lost jobs, protection of wages, support for income and livelihood and improvement of Nigeria’s social safety net.”

As far as the NLC is concerned, any employer of labour that stopped or reduced salary of workers on the account of COVID-19 would incur the wrath of the Organised Labour.

“This is not the time to stop or deduct from workers’ salaries. Such an action would be both illogical and illegal as workers’ salaries are core elements of employment contracts and collective bargaining agreements.

“Without the twitching of our muscles, no socio-economic puzzle can be solved. In reciprocation of the enormous sacrifice made by workers, we urge employers of labour to show solidarity with the sacrifice of our workers and people by ensuring wage protection, income support and social inclusion at these trying times.”

He reassured the workers that their priority in these trying times remains the cautious, gradual, evidence-led and smart restart of the economy so that they can go back to work.

The NLC and the Nigeria Employers Consultative Association (NECA) believe the government must find equilibrium between saving lives and saving means of livelihood of Nigerians.

Wabba said governments should see how to relax the lockdown order from state to state, as well as think out of the box so that the income of the workers is not jeopardised at the end of the day.

“While we understand the public health imperatives for extending the lockdown in some parts of the country, it is also very important to underscore the fact that the states currently under total lockdown are the economic and administrative nerve centres of Nigeria.

“This is very dicey. As much as it is important to keep many Nigerians from dying in the hands of Coronavirus, loss of income and the accompanying destitution can also be a pathfinder for numerous other sicknesses and deaths,” he said.

Olaleye opined that it is the responsibility of the leadership of the Organised Labour to protect jobs.

“We don’t envisage redundancy or layoffs but because of speculations and need to be on a safer side, TUC will ensure that the laws and collective agreement regarding the contract of employment are strictly followed.

“Work/life balance has been a myth for a long time. As the pandemic has exposed the new trend of working from home, TUC will ensure that people care about family, and also care about the job, and prioritise health.”

Wage war looms as oil price keeps tumbling

The coronavirus pandemic may constrain the ability of the government to implement the N30,000 new minimum wage. This is because the emerging health and economic risks resulting from the COVID-19 pandemic and decline in international oil prices pose threats to Nigeria’s economy, as well as the lives of its citizens.

The International Monetary Fund recently projected that the Nigerian economy would shrink by 3.4 per cent this year, worse than the global average projected at three per cent.

Crude oil prices had dropped from about $46.64 per barrel in February to less than $20 per barrel, recently.

The Federal Government had in the 2020 budget proposal revised downward the revenue projection for the 2020 fiscal period by N3.3 trillion from the initial approved amount of N8.41trillion to N5.08 trillion.

The reduction in revenue projections was due to the negative impact of the coronavirus pandemic. The pandemic has so far led to an unprecedented drop in global crude oil prices.

The outbreak of the deadly virus in Nigeria had resulted in the lockdown of many states in Nigeria, a development that has paralyzed economic activities.

So far, in Nigeria, the very visible impact has been huge, especially about government finances, capital flow reversals and loss of income to businesses and households.

Based on the revenue parameters upon which the revised proposal was made, the Federal Government had reviewed downwards the oil price benchmark from $57 per barrel to $30 per barrel.

Similarly, the oil production volume was cut from the initial 2.18 million barrels per day to 1.7 million barrels per day.

These developments have heightened fears about the ability of the government to finance the N30,000 new minimum wage.

The uncertainty was further reinforced by the dwindling revenue inflow into the Federation Account. For instance, the three tiers of government suffered a shortfall of N413.3billion in allocation from the federation account within two months covering January and February this year.

The shortfall was arrived at based on an analysis between the financial assumptions underpinning the 2020 Appropriation Act and the actual revenue generated and shared among the three tiers of government.

Allocation to the three tiers of government is made monthly by the Federation Account Allocation Committee.

Based on the financial assumptions underpinning the 2020 Appropriation Act, monthly FAAC disbursements to the federal and state governments was projected at N888.5 billion.

However, due to the significant drop in international oil prices, FAAC monthly disbursements have declined in recent months to N716.3 billion in January and N647.4 billion in February.

This implies that the N716.3 billion January allocation represents a shortfall of N172.2 billion, while the N647.4 billion shared in February is a shortfall of N241.1 billion when compared to the monthly target of N888.5 billion.

Due to the effect of coronavirus pandemic on the economy which had led to a decline in revenue, some state governments have been tinkering with the idea of suspending the payment of the new minimum wage.

For instance, the Gombe State Government last month declared that it had suspended the implementation of the payment of the N30,000 minimum wage.

Deputy Governor Manassah Jatau said the decision was taken after consultation with the standing committee on minimum wage and relevant stakeholders.

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“The minimum wage increment and its consequential adjustments adopted by the state have been suspended until when the economy of the state improves,” he said.

Speaking on the development, some finance and economic experts said the government’s reliance on crude oil for more than 80 per cent of its foreign exchange earnings and 60 per cent of revenues meant the economy was exposed to the impact of the coronavirus on crude oil prices.

They said projected declines in revenues as occasioned by the drop in crude oil prices constrain the government’s ability to meet its commitments in 2020.

Olaleye said the fall in the price of crude oil globally was not enough for workers to accept deferment of the new minimum wage of N30,000 per month till next year.

Olaleye said it was too early to put forward such proposal if government at all levels had been prudent with past earnings and shared allocations.

He said: “The proposal, if put forward, will sound mischievous if we consider how much we have earned from crude oil and other earnings in the past. Why are we quick to talk about the suspension of the minimum wage? Why don’t we talk about cutting down the cost of governance?

“It is a painful thing that the price of oil crashed in the global market. Labour has always called for diversification of the economy but the craze for oil money blindfolded the powers that be. Nobody knew this (COVID-19 pandemic) would happen but it did. The government must pick the lessons and run the country with the fear of God.”

The TUC, like the leadership of the organised labour in the country, said they would resist any attempt by the government to stop the implementation of the N30,000 because of the crash of crude oil price occasioned by the COVID-19 pandemic.

The Vice President, Nigeria Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), Prince Billy Harry said the drop in oil revenue as a result of COVID-19 pandemic should not be used as an excuse not to implement the minimum wage.

He said: “Most state governments accommodated the implementation of the new minimum wage in their 2020 budget.

“I am aware that negotiations had either been concluded or at the point of conclusion in many states as of the end of December 2019. Any downward adjustment in the budget must not be at the expense of workers’ salaries which must be prioritised.”

He said the implementation of the Value Added Tax increase from five per cent to 7.5 per cent, which commenced in February, meant that state and local governments would be the greatest beneficiaries taking 50 per cent and 30 per cent respectively of the total collections.

“The government’s fiscal response measure does not include suspension of the VAT increase and so why suspend minimum wage?

But an economist, Odilim Enwagbara, said the dwindling revenue had made it difficult for states to meet the minimum wage payment.

However, he said rather than using this as an excuse, they should go into an aggressive internally generated revenue drive.

He said: “Agriculture and food processing and packaging can earn states a lot of revenue. The formalisation of thousands of informal activities will increase small business players in these states, especially because Small and Medium Enterprises are around the world known as the biggest source of tax revenue.”

Post COVID-19: Fed Govt promised 10m jobs

It may not be all gloomy at the end of the pandemic as the Federal Government has pledged to create ten million jobs at the end of the coronavirus pandemic.

Minister of Labour and Employment Chris Ngige said the target of the government was to make jobs available to Nigerians.

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The minister said: “We are part of the Economic Sustainability Committee which is the main committee. The other ministries are implementation ministries and various job creation initiatives and things that will put more money into the economy.

“The committee is still working. We have fanned out into subcommittees. I have just finished a meeting on my subcommittee which is a committee on job creation for women and youths both COVID-19 and post COVID -19.

“We are putting our report to the main committee and the next meeting of the main committee is either tomorrow or Wednesday. The committee will take a look at the situation in government.

“We are looking at 10 million (jobs) encompassing existing jobs and creating additional ones. We want to create an additional ten million jobs after the pandemic. The jobs will be created within six months to twelve months.”

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