There is no doubt that the minimum wage issue has lingered on for a while, both as ‘news seller’ and as a tool for whipping emotions. As a result, some facts related to it have been lost to the one-sided discourse, especially the pension dimension to the higher wage.
It is a proof of slanted discussion that nobody is paying attention to the employer’s contribution of 10 per cent of the monthly wage toward the staff’s pension savings as provided for a Section 4(1) (a) of the Pension Reform Act 2014.
The Section provides that the employer shall contribute “a minimum of ten per cent” of the employee’s emoluments to the Retirement Savings Account of the staff. It is not even just ten percent of the N30, 000 of the Minimum Wage. It is ten per cent of the emoluments.
The truth is that, put together in the proper context, that innocent sounding 10 per cent represents a mountain of money the government has to cough out and pay alongside the minimum wage on each pay day.
The money for pension contribution has to be sourced together with that for salary in a country where most of those who are eligible to pay tax are reluctant and unwilling to pay or dodging and avoiding it. Where it is paid, there could be underpayment. Yet, everyone wants to have the best from the government.
The point being made here is that labour and other groups, including the media, should alwayS look beyond the headline figure of N30, 000 minimum wage, but should equally and always acknowledge the ten per cent pension contribution. Doing so will make the picture bigger and clearer. The interest of the future retirees ought to be highlighted in the discourse.
It is important to give the pension angle in the minimum wage discourse the attention it deserves. Today’s workers are tomorrow’s retirees or pensioners. Besides, when pension savings are lent to operators in the real sectors or to finance critical national infrastructure, economic activities expand, thereby creating jobs, thus enlarging trade union membership.
In a 1985 book chapter titled ‘Unions, Pensions, and Unions and Pension Funds,’ Professor of Economics, Richard B. Freeman of the Harvard University argued that, labour unions should be as interested in the size of percentage contribution by employers for pension as a component of a monthly pay package, as they are in the monthly wage. This he argued, is simply because the larger the contribution to the pension fund is, the greater the influence labour could have in determining where pension funds are deployed.
Indeed, elsewhere in the world negotiations over wages and other benefits for workers invariably include the size of pension, which is for worker’s life in retirement, but this is hardly the case in Nigeria.
Just to illustrate the point, in Detroit the United States of America where the members of the United Auto Workers have been on strike for three weeks over conditions of work, Reuters News Agency reports that the remaining sticking points are wages and pensions.
“As the U.S. strike by the United Auto Workers (UAW) union against General Motors nears three weeks, the main remaining issues in the negotiations have narrowed to wages and pensions,” it says.
The Reuters report explained further “the GM strike began on September 16, 2019 with the 48,000 UAW union members seeking higher pay, greater job security, a bigger share of the leading U.S. automaker’s profit and protection of healthcare benefits.”
Although labour is planning to go on strike because its leadership has failed to dictate the percentage of salary payable to senior civil servants as consequential increment after hiking the monthly minimum wage to N30, 000, pensioners in the country are happy with the Muhammadu Buhari-led administration for demonstrating a caring attitude to their welfare.