In an article entitled ‘Minimum Wage Review – My Takeaway’, Fashola said what the constitution provides for to be legislated on in the exclusive-legislative list is the country’s minimum wage.
A person earning a salary is paid a fixed amount over a period of time, while a person earning a wage is paid by the hour.
Recently, the organised labour has been demanding an increase in minimum wage of N30,000 owing to the rising inflation that has pushed food prices up.
While the federal government has offered to pay N62,000, labour unions have insisted on N250,000.
Fashola said there is need for the constitution to be amended to allow for the fixing of minimum salaries of workers.
“In my recent monograph, ‘The Nigerian Public Discourse: The Interplay of Empirical Evidence and Hyperbole’, I had made the point at page 89 that the word used in item 34 of the Exclusive Legislative list is minimum wage,” the former minister said.
“It does not talk about salaries. I further stated that ‘…it has also been shown, wages and salaries are different and should not be conflated.’ I posited that ‘…efforts to improve minimum wage must be that and nothing more. It must not translate to a salary overhaul by accident’.
“Therefore, it seems obvious from this definition that by making a law in Section 3(1) of the Minimum Wage Act that the minimum wage of N30,000 shall be paid monthly, the NASS may have acted unconstitutionally by legislating on a SALARY (monthly payment) when they only have power to legislate on WAGES, an hourly payment.
“This is important while the conversation on minimum wage is being had in 2024 because in Section 3(4), the minimum wage ‘shall be reviewed in line with the provisions of this Act’ which includes Section 3(1) that has prescribed a monthly amount instead of an hourly wage.
“If we follow the proper definition of wages as an hourly rate and apply the global method for computing it, which is to divide the gross annual sum by 52 weeks, and further by 40 hours recommended per week, we will have for Nigeria a minimum wage that is not N30,000 per month, but rather N30,000 X 12 (months) = N36,000 divided by 52 (weeks) = N6,923.07 divided by 40 (hours), which will give a minimum wage of N173.07 per hour.
“What we have done is to erroneously fix monthly minimum salaries as wages, and then effect consequential adjustment for all other SALARY EARNERS, which results in a bloated compensation wage that employees find difficult to meet.”
The former governor of Lagos said both high and low income earners deserve adjustments in their salaries and wages owing to the rising cost of living.