New minimum wage: Labour hints at radical shift in negotiations

…To demand inflation-proof wage, cost-of-living formula

…Says pay must match reality
By Victor Ahiuma-Young

Ahead of new minimum wage negotiations, Organised Labour has hinted at a major shift toward systems that reflect economic realities, rather than fixed figures.

In an interview, President of the Nigeria Labour Congress, NLC, Joe Ajaero, said workers would push for a more dynamic framework that ensured wages kept pace with rising living costs and inflation.

This came as the NLC and the Trade Union Congress of Nigeria, TUC, led by Festus Osifo, said talks for a new national minimum wage would begin in July, ahead of the expiration of the current agreement next year.

The early start, labour leaders said, was aimed at avoiding the familiar cycle of delays, prolonged negotiations, and unpaid arrears that had historically burdened Nigerian workers.

At the heart of the proposed “radical shift” is a demand for wages that truly reflect economic conditions.
Labour is considering either an inflation-linked wage system or a cost-of-living formula tied to everyday expenses such as food, transport, and housing.

According to Ajaero, the goal is clear: pay must match reality, ensuring that workers’ earnings retain real value in the face of economic instability.

He said: “Negotiating the minimum wage has traditionally been a routine process carried out whenever the agreement expires—and it is set to expire again next year. Ideally, negotiations should begin early enough to ensure that a new wage structure is ready for implementation immediately after expiration.

“However, the reality has often been different: agreements lapse, discussions drag on, and workers are left waiting while governments delay—and, in many cases, fail to pay arrears.

“This time, we intend to begin negotiations early so that, by the expiration date, a new agreement is already in place and ready to be implemented. That is our current approach.

“Given the realities of our environment, there are two key directions we may consider. One is linking wages to inflation, allowing for automatic adjustments based on rising prices. If inflation increases, wages should adjust accordingly to preserve purchasing power.

“The alternative, an approach we previously advocated, is to anchor wages to the cost-of-living index. This means examining real conditions on the ground: transportation costs, food prices, rent, and other basic needs.

‘’Wages must be tied to these realities. It is not enough to arbitrarily suggest figures, whether N100,000 or N50,000, without considering what those amounts can actually achieve in practical terms.

“Ultimately, many factors determine how effectively wages can support workers over time, and these must guide our demands.

“For instance, while a wage of N70,000 may appear significant in nominal terms, its real value quickly diminishes in an unstable economy. The issue is not simply about negotiating higher figures, N1 million means little if it cannot purchase basic necessities like a bag of rice.

“This is why broader economic considerations must come into focus. In fact, one could even consider a temporary wage freeze if it would contribute to stabilising and strengthening the naira. If the currency were to gain real value, approaching parity with stronger currencies such as the dollar or the pound, then even a modest wage could sustain a decent standard of living.

“The goal is not just higher wages on paper, but real value in practice. In stronger economies such as the US and UK, even relatively modest incomes can support a decent life because the currency itself is stable and reliable.

“Therefore, both government and employers must recognise the need to strengthen the value of the naira. Without addressing this fundamental issue, wage increases alone will continue to fall short of improving workers’ living standards.”