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MINIMUM WAGE HISTORY AND THE VARIOUS MECHANISM OF RESOLVING IT: 1900-TILL DATE. BY ABIMBOLA BABATUNDE ND, B.

A (Hons), M.SC
Mobile: +2347033584015 Email:tundeabimbola@gmail.com

November, 2011.

INTRODUCTION: The history of minimum wage is about the attempts and measures governments have made to introduce a standard amount of periodic pay below which employers could not let their workers fall. It has become a labour issue that has been generating controversies in recent time. The agitation for a fixture of a certain amount that even the least worker should earn in every organisation has lead into many labour activities such as strike, boycotts even demonstration in Nigeria and some other countries. The fact cannot be denied that minimum wage has its criticisms. Many economists, since it establishes a price floor on wages. Price floors can lead to a dead weight loss in the economy, which means that inefficiencies exist. In this case, the minimum wage might force companies to hire fewer employees, thus increasing unemployment. However, this paper shall attempt to see what minimum wage is all about in terms of its definition but its history and the various mechanism of resolving it from 1900 to date shall be the main focus.

WHAT IS MINIMUM WAGE? Minimum wage is the lowest hourly wage allowed by federal and state labour laws. It generally applies to unskilled or semi-skilled laborers working in service industries or manufacturing plants. Certain occupations such as agricultural workers are usually exempt from minimum wage requirements, as are certain service workers who receive tips or other compensation equal to the minimum wage. It is the minimum amount of compensation an employee must receive for

performing labor. Minimum wages are typically established by contract or legislation by the government. As such, it is illegal to pay an employee less than the minimum wage.

HISTORICAL BACKGROUND:
On the international scene, minimum wage legislation first appeared in New Zealand in 1894 and in the Australian state of Victoria in 1896 after significant "anti-sweating" campaigns. It was subsequently introduced in Great Britain in 1909, and in a number of continental European countries a few years thereafter. The starting Point: The year 1900 saw the beginning of the Fair Wages Policy. In March of that year a resolution was passed by the House of Commons which were directed against abuses arising from the sub-letting of Government Contracts. It declared it to be the policy of the Government that wages generally accepted as current in each trade for competent workmen in the district where the work is carried out should be paid on all public works undertaken by the Government itself or aided by Government funds. The Federal Government's actions in 1900 helped to gain wide acceptance of the fair wage principle. In 1907 Ernest Aves was sent by the British Secretary of State for the Home Department to investigate the results of the minimum wage laws in Australia and New Zealand. In part as a result of his report, Winston Churchill, then president of the Board of Trade, introduced the Trade Boards Act on March 24, 1909. It became law in October of that year, and went into effect in January 1910. In North America, the state of Massachusetts was the first jurisdiction to institute a minimum wage, in 1912. However, the Massachusetts legislation, which only applied to women and minors working in certain industries, contained numerous exceptions and lacked an effective enforcement mechanism, relying solely on public opinion to pressure employers into compliance. Several other American states followed suit, although the history of the minimum wage legislation in the

United States was marked, at least in its early stages, by a number of judicial and political setbacks for its proponents.1 In Canada, the earliest attempts at regulating the field of minimum wages resulted in the payment of "fair wages" to persons engaged on public works and government contracts. Soon after the turn of the last century, Canadian legislators began enacting "policies" to address issues such as the very low wages, long hours of work and unhealthy working conditions prevailing at the time The first provinces to enact minimum wage legislation were British Columbia and Manitoba, in 1918. By 1920, four other provinces-Nova Scotia, Ontario, Quebec and Saskatchewan-had followed their example. However, these laws applied only to female workers in some types of employment. Indeed, North American labour unions at the time generally considered that they were in a better position to ensure adequate wages for men through collective bargaining, but they supported State intervention to protect working women, who were mostly unorganized and, hence, more vulnerable to exploitation. The general pattern of these Acts was basically the same. A board made up of employer and employee representatives, and sometimes of the public, with an impartial chair, was authorized to hold investigations and to issue orders as to minimum wages for female employees. In Ontario and Quebec, the law at first referred to wages only. In the other provinces, the Board had the power to regulate hours and conditions of labour as well. British Columbia adopted the Men's Minimum Wage Act in 1925, making it the first province to legislate a minimum wage for male workers. Almost a decade passed before other jurisdictions extended the minimum wage to men: Manitoba and Saskatchewan (1934), Alberta (1936), Ontario and Quebec (1937). Prince Edward Island was the last to do so, in 1960 (it had established a minimum wage for women only the year before). It should be noted that the minimum wage rates for men were initially set higher than for women, since it was assumed at the time that men should be a family's main breadwinner. Gender-based minimum wage differences slowly gave way to the principle of equal pay during the 1950s, and disappeared entirely by 1974. Until the early 1970s many provinces also had zones or geographical differentials whereby workers in urban centres were paid a higher wage than those in rural

areas. At the beginning of 1960, for example, six provinces had such zones. The reason for having different minimum wage rates was the generally higher cost-ofliving in the cities compared to rural areas. Throughout the history of the minimum wage there have also been various other differentials. Youth differentials were once very common, though many jurisdictions have repealed them since the adoption of the Charter of Rights and Freedoms in 1982. Occupational differentials have been and still are rather common. For example, domestic and farm workers have generally been excluded from minimum wage provisions or, if not, have been entitled only to a lower minimum rate. Occupations like restaurant workers, hairdressers, salespersons, and construction workers have also historically been treated separately. In addition, the legislation of almost all jurisdictions allowed the employment of workers with disabilities at rates below the legislated minimum, usually under a system of individual permits. However, as has been the case for youth differentials, many jurisdictions have repealed such provisions since the early 1980s.3 In Nigeria, the difference in pay between managers and workers is not only one of the highest in the world: out of every N1 paid as wages, managers collect more than 80 kobo while workers receive less than 20 kobo; the difference has been increasing over the years. At the same time, owners and managers of banks, top government officials and members of the political class have seen their pay and wealth swell astronomically while workers have had to survive on starvation wages. Workers can no longer survive on what they earn; the situation is made worse by the fact that those who work also have to support family members who form part of the huge army of the unemployed. Therefore, It has become crystal clear that there is an urgent need for an upward reviewing of the national minimum wage and an upward general review of wages and salaries. Organised labour strike actions in Nigeria have been an effective tool for making demands on government. Since the late 1980s, the NLC has intervened at key moments in Nigerias political struggle. During this period, the NLC caught the

governments attention and on occasion forced the reversal of unpopular policies. In 1993, organized labour protested the annulled election of MKO Abiola. The Labour union in 1994 stood against Abachas brutal reign. Similarly, the union used strike action to resist government plans to hike fuel prices during the Obasanjo administration. These, in part, earned us our democracy. But the days of the unions leading from the front on matters of national significance seem to have passed, and in recent times they only crack the whip when they want the government to increase their salaries. The NLC approach is now reactive rather than proactive. It is this approach that makes work conditions and welfare package measures below what can ideally be described as a living wage On the 1st day of May 2000, the National Assembly enacted the National Minimum Wage Act that: as from the commencement of this Act, it shall be the duty of every employer (except as provided for under this Act) to pay a wage not less than National Minimum Wage of N5,500.00 per month to every worker under his establishment. The law sets a minimum wage, which is reviewed infrequently. Private sector minimum wages increased during 2001 to match the 2000 increase in the public sector wage scale; however, real private sector wages greatly exceed the minimum wage. In 2000 the minimum wage increased to 7,500 naira per month (approximately $75) for federal workers and to 5,000 to 6,500 naira per month ($55 to $65) for state employees. Sometime, it prohibits employment of children less than 15 years of age in commerce and industry and restricts other child labor to home-based agricultural or domestic work. The law states that children may not be employed in agricultural or domestic work for more than 8 hours per day. The Decree allows the apprenticeship of youths at the age of 13 under specific conditions Agreements reached with government were sometimes distorted at Implementation or not implemented at all by government. For example, the 2000 Wage Review Agreement provided for a further 25per cent wage increase for workers with effect from May 1, 2001, and 15 per cent wage increase with effect from May 1, 2002. This was not implemented. Following industrial dispute over this a 121/2 percent increase rather than the 35 per cent agreement in 2000, was signed in 2003. But in the end, only an increase of between 4 and

12 1/2 per cent was implemented by the Federal Government In 2003, arising from the challenge of increasing salaries by 12.5% in the public sector, what the Obasanjo administration then did was to constitute a negotiating team and tasked the negotiation team with the responsibility of working out a distribution formula based on additional expenditure commitment of N9 billion and subject to those at the bottom receiving 12.5% salary increase. That panel was chaired by Chief Ufot Ekaete and at the end of the negotiation, those at the top (level 17) ended up with just 4%.In order to have the right attitude for a technical negotiation therefore, there is the need for government to take measures to restore public confidence on its willingness to pay the minimum wage. Related to this is the issue of management of interests. In the process of management of these interests, government should resist the temptation of reckless debate around withdrawal of subsidy or deregulation and review of revenue sharing formula. Valid as they may appear, they are irrelevant to the implementation of the new minimum wage. Government, at whatever level can not appear to be giving conditions before a law is respected. In 2007, the demand won by workers for a 25% general wage through the Ernest Shonekan Wage Consolidation Committee was arbitrarily cut down to 15% by Obasanjo, workers have struggled at 15 times to have wages improved and a national minimum wage legislated upon. But the struggles produced notable victories for workers and the NLC, it was usually the case that: the National Minimum Wage was always set below the minimum wage needed by workers to survive. Because of the inadequacy of the wage, some state governments elected on their own to pay more. Even then, there were also some state governments that pay less than the stipulated national minimum wage. The result was that workers always could not cope. The wage reviews were largely unstructured; sometimes negotiated wages were changed by government through circulars; at other times, government effected unilateral wage increases. On the 23rd of February, 2011, the Senate of the Federal Republic of Nigeria approved Eighteen Thousand Naira (N18, 000) as the minimum wage for the Nigerian worker. The bill which was given an expeditious passage by the Upper Chamber increased the minimum wage from N7, 500 to N18, 000(USD$118.00) Section 2 (1) of the National Minimum wage states, As from the commencement of this act, it shall be the duty of every employer to pay a wage not less than the

national minimum wage of N18,000 per month to every worker under his establishment.4 However, the minimum wage issue was initially shelved, until later when it was pick up for discussion. The workers' leadership also claimed that the strike was shelved, apart from the fact that Government has agreed and signed to pay the minimum wage, but as a result of the presence of the British Prime Minister, David Cameroon in Nigeria as well as the Boko Haram security challenges in the country Speaking on the importance given to the country on the shelving of the warning strike, despite Government, at the tail end of the struggle bowed before workers, the LASCO general Secretary, comrade Abiodun Aremu called on critics to look inward on how the nation's leaders speaks at both sides of the mouth in governance He said "The leadership of Labour and LASCO did not chicken out of the minimum wage strike, but considered the unity of Nigeria first, as the only necessary condition for the nation to move forward"5 The Nigerian government finally agreed to pay the monthly minimum wage of 18,000 naira (US$ 120) across board with effect from the month of August 2011. Minister of Labour and Productivity, Emeka Wogu, read the communiqu at the end of the resumed talks between government and organized labour in Abuja and assured that the Federal Government had fully with the National Minimum Wage Act as signed by President Goodluck Jonathan.

CONCLUSION: Today, Nigerians who are lucky to have jobs are finding it increasingly difficult, if not impossible, to survive on their monthly pay. The major reason for this is that the pay of the Nigerian worker is not only one of the lowest in the world; it has also not improved as it should in the face of changes in market conditions. Workers in the public sector are particularly worse off. As huge revenues have continued to be acquired from the sweat of workers, the pay and conditions of workers have continued to deteriorate; workers have increasingly been excluded from the wealth created by their labour. However, Labour Congresses has been making these demands with great patriotism, sensitivity and responsibility. They hold that collective bargaining and negotiations with trade unions are sacrosanct and in consonance with the spirit of democracy. They are ever calling on government to set up the necessary structures for constant negotiations when needs arise. When negotiations is being delayed in this regard it further compounds the living conditions of workers of Nigeria in the face of the alarming mass poverty already destroying their lives. Till now, workers find that they have to fight yet again to get government to agree to negotiate a new National Minimum Wage and a general upward review of wages

REFERENCES: 1. Waltman, Jerold. "The Politics of the Minimum Wage." University of Illinois Press. 2000 2. Sanjiv Sachdev (2003). Raising the rate: An evaluation of the uprating mechanism for the minimum wage. Employee Relations. 3. "History of the National Minimum Wage". Employment Matters. United Kingdom Department of Trade and Industry. 17 June 2006. http://www.dti.gov.uk/employment/pay/national-minimum-wage/HistoryNational-Minimum-Wage/page12572.html. Retrieved 2006-06-22.Note: Date enacted was 1 April 1999 4. Akunnakwe Kenneth Chukwuemeka, Editor-in-Chief of Nigeria's only publication on CSR,csrwestafrica.com 5. Uzomba Uzuegbu, Nigeria: Labour Didn't Chicken Out On Minimum Wage Strike, Says LASCO, allafrica.com