Should we increase the Minimum Wage?

So why do I think the Nigerian government should increase the minimum wage? #Storytime

Why the Government Should Pay More

In 2002, I was in Lagos searching for an internship position. The average pay for interns at the time ranged from N3,000 to N5,000. There was a popular telecoms company that always took on interns and paid N3,000. That was my fall-back option but my goal was to find a place that paid N5,000. I scoured the whole of Lagos, walking door-to-door, office-to-office, dropping off what was my resume at the time. You have to remember this was 2002, before Facebook, LinkedIn or Nairaland.com. I didn't even have a mobile phone.

Eventually I got an interview at this company in Victoria Island. They offered to pay me N6,000 but I hated the thought of working there. Why? First thing, everyone wore uniforms in this place. And when I say everyone, that includes 40-year old men with wives at home. The company manufactured electronic cards not medical equipment! Why the uniforms? When I say uniforms, I'm talking plain white shirts. No stripes, no patterns, no colours or shades. Just plain white shirts. Monday to Friday. Now that was a pet peeve for me.

The other (more important) thing that I did not like was the lack of professionalism I observed. First the "interview" was basically me standing between two desks in some back office where two guys simply bantered about if they should take me on or not. They asked about my surname, who I was related to, what school I was in, my hometown, nothing relevant to what I knew, what I would learn or what I could contribute, even as an intern. To make things worse, while I sat in the reception, some dude (also in uniform) was collecting plastic bowls and taking "breakfast orders". He was about to go buy rice for the "senior" workers, also in their white uniforms. If I took on the offer, that would be me in a couple of weeks.

Luckily a week later, I got a chance for an interview with an audit firm in Ikoyi. They needed interns for their IT department. This was a proper interview. I was asked what course I was studying, what skills I had picked up in my 4 years and what I was interested in learning. Eventually the guy interviewing me asked if I had any questions. I asked him how much they were going to pay me. He said he didn't have the details but wanted to know how much I thought was fair. I told him, as it was a learning position, I only needed something to cover my transportation and feeding during the period: N5,000 would be okay. This dude laughed and said he didn't know how much I would be paid but he was sure they would "do better than N5,000".

I resumed a week later and was paid N12,500. N12,500! Remember this was 2002. The minimum wage was N7,500. I didn't even have my degree yet. They could easily have paid me less like other Nigerian... oh did I mention? This was not a Nigerian company. It was a multinational.

Long story short I did my 6 months with these guys and returned to school. In a conversation with a friend of mine, she was like, "So you finally went for the money. I thought this internship was about you building your skills." I told her I did both.

She went, "Yeah but they paid you well, abi?" I smiled. Then I proceeded to tell her the epiphany I had gained in those 6 months.

"Let me tell you something about the white man." I said.

"The white man will pay you well, but he will get his money's worth. You will sweat for every single dime you earn. In fact, you will know that you earned it. And more."

And that, that right there, is the reason the Nigerian government can and should pay more.

But the story continues...

Why the Government Does Not Pay More

A couple of years later, I was serving in a small town in Ebonyi State. I would go to the Local Government secretariat once a week as part of my CDS, Community Development Service. The place was always deserted apart from the cleaners and other youth corps members.

Then one particular week, the CDS day coincided with the last day of the month and the secretariat was filled with people. Apparently they were there to pick up their pay checks for the month. And it turns out that practically everyone in this town worked at the Local Government Secretariat: The hairdresser next door, the "vulcanizer" guy down the road, even my landlord. Everyone was there to get paid. These people were busy with their own businesses throughout the month but showed up at the end of the month to collect their "share of the national cake".

Now you understand why the Nigerian government is unwilling to increase the minimum wage.

Where am I going with this?

Where We Are Today

For the past few months the Federal Government of Nigeria has been at loggerheads with Nigerian labour unions on the subject of the minimum wage increase. The government claims it cannot afford to pay more due to the drop in revenue from crude oil, the labour unions insist it is near impossible for any one to live on less than N30,000 a month ($2, 75 cents) in today's world. There was the threat of a nationwide strike with the resultant impact on fuel, transportation, food, hospitals, schools, economic shut down. You know the drill.

I think the first question we need to answer is not can the government pay more, but should any employer in Nigeria, the government inclusive, pay less than $2, 75 cents per day? You will find out that most established companies (at least those listed on the Nigerian Stock Exchange) already pay more than to their entry level staff. Even contract workers. So why doesn't the government?

Simple. The government, as an employer, does not get comparable value from its workers. Right now you have a Nigerian civil service where people show up at work but hardly get anything done, most of the employees are poorly qualified and poorly trained, most departments do not generate any revenue (only)

The extent of waste we have in the civil service with ghost workers, deceased employees still being payed, duplicated roles and the sheer inefficiency of the entire system is the reason the government, any government, will be reluctant to increase the minimum wage.

Multinationals in Nigeria pay more than the minimum wage because they get value from their employees. The government does not get any value from it's employees. It's just a way to share the National cake i.e. money from crude oil in the Niger Delta. This is not sustainable.

If we agree the minimum wage should be higher than N23,000, then the Nigerian government should be looking at how to make the civil service generate the additional funds. The government needs to take decisive action, trim the fat, remove the waste, drive for discipline and productivity in the civil service. Perhaps then the ministries will generate the funds required to at least run their own offices. And pay their staff. Adequately and on time. Don't let me go into the unending cycle of delayed salaries today.

The Lesson for You

Why should  this  matter to you? Here are 3 lessons we can learn from this minimum wage saga.

1. Always be adding value. As a business person or an employee, so long as you add true value to your customers or employers, you should get paid and paid well. If you're simply counting the hours till pay day, chances are that salary increase or promotion will be delayed. Pro Tip: Become indispensable to your employer i.e. difficult to replace and you can almost always dictate your pay.
2. You get what you pay for. The saying goes, if you pay peanuts, you get monkeys. As an employer, you get the kind of employees that you're willing to pay for. Business owners should not complain that it's difficult to find good workers if they scrimp on every contribution to their staff well-being (salaries, pensions, office equipment, etc.). This lesson also applies to people that scrimp on general purchases. Generally speaking, you get good quality if you're willing to pay for it. Either in cash or the time and effort required for that elusive search for a truly good bargain.
3. Always ask Why. In negotiating (and generally in life), understanding the motivations behind someone's position on things will help you find common ground.

I'll end here but before I go, if you haven't subscribed to my YouTube channel, click that subscribe button right now and ring the bell of blessing beside it! Thanks for listening to this long rant. Hope you got something out of it.

This article was originally posted on modupesanda.com in December 2018, a few weeks before the Nigerian government did increase the minimum wage and then subsequently struggled to find resources to actually pay the new rates.