OPINIONS:Workers Retrenchment, Minimum Wage Conundrum & Pension for Governors

While States grapple with unpaid arrears of salaries, gratuities and other perquisites accruable to workers and retirees, it is sad, the oddity of former governors coasting home after regimes of misgovernance, life-long lump sum annual pension from the empty treasuries of their bequeathed pariah states. We shall revert to details in the ensuing discourse.

Meanwhile, it could be recalled, that the organised Labour Unions, had on May 1st, during their workers day celebration, demanded for a new minimum wage of N56,000, with the Federal Government agreeing to set up a joint committee to begin negotiations as reported by Financial Watch, Dec. 24/16.

Unfortunately again, some of the states are tempting to exacerbate the situation with experimentation of retrenchment as a crisis generating phenomenon which will not end as a null hypothesis.

For emphasis, the Lagos Pension Law approved by former governor Bola Tinubu in 2007, a former governor will enjoy the following benefits for life: Two houses, one in Lagos and another in Abuja. (Property experts estimate such a house in Lagos to cost N500m and Abuja N700m.)

Others are six brand new cars replaceable every three years; furniture allowance of 300 percent of annual salary to be paid every two years, and a close to N2.5m as pension (about N30m pension annually).

He will also enjoy security detail, free medicals including for his immediate families.

Other benefits are 10 percent house maintenance, 30 percent car maintenance, 10 percent entertainment, 20 percent utility, and several domestic staff. Akwa Ibom, Rivers and Kano are all in this criminal pension scheme.

Lagos State, Kano, Akwa Ibom, unlike almost failed states like Taraba, Benue, Nasarawa, and elsewhere with pathetic Food Poverty line of N39, 759.49 on the purchasing power parity scale with GDP or value of all final goods and services produced within a state in a given year of less than $6million (NBS, 2016). Yet, it is inexcusable for a Governor with all the mouth watering perquisites to become a pensioner just for serving a couple of 4 or 8 years as the case maybe. It is unthinkable. Except, pension is now with a different meaning in the face of a minimum wage of N18,000 and in the face of a non poor population of just 31% of the population of Nigeria.

The benefits of raising minimum wages are something we believe workers deserve: better pay. Unfortunately, the costs tend to involve higher unemployment, which no country needs right now.

Minimum wages in developing countries tend to be set higher, are never rigorously enforced, and labor markets are often segmented into formal and informal sectors with minimum wage policy only covering formal workers. Given these differences and that most developing countries implement minimum wage policies, understanding their consequences on labor markets is critical for economic growth, developing effective labor policy, and poverty alleviation (World Economic Forum, 2016)

Determining whether the benefits of minimum wages offset their costs is more complicated than it seems. The difficulty arises because minimum wage increases are endogenous, set in response to previous economic conditions that also affect earnings and employment such as growth or recession, inflation, and changing demand for goods and services over time. Most minimum wage policies in Nigeria avoid endogeneity problems by exploiting a source of exogenous variation, often due to a policy change or natural experiment. While the majority of states use a single minimum wage shock for identification, the result of a strategy that exploits multiple sources of variation: non annual reforms to minimum wages despite negative change in the value of local currency as it affects the invisible hands of demand and supply.

It is therefore disheartening to note again that while the economy is hit with hyperinflation and inadmissible depression, there is palpable anxiety that sooner, every elected politician will become a pensioner like the presidents, governors already have been despite the non contributory nature of their kind of pension scheme, for doing next to nothing other than wearing Agbada, Asobi and Asoke, gallivanting.

In the interim analysis, it is hoped that as the debate on the propriety of extending the largesse of life pension to the presiding officers of the National Assembly rages, the legitimacy of the laws made by various states approving life pension packages for their ex-governors and their deputies remains a subject of litigation.

The suit with number, FHC/ABJ/CS/564/2014, jointly filed by two individuals, Ayodeji Kolawole and Tunde Asaju, as well as a group of 38 other civil societies (Punch, 13/6/16) is therefore a development that is not only timely but exigent.

N500million plus of Taxpayers' commonwealth payable to, mostly, opportunistic elements on a conspiratorial mission to under-develop the indigenes of the states is not only criminal but a trip to the land of poverty which must be resisted against any prompting on the part of Politicians who are averse to payment of workers salaries, gratuities and pension despite bail out, et al.

Gurgur Japheth MP is a Public Policy Analyst from the Commonwealth of Gboko, Benue - Nigeria