Governor Godwin Obaseki has given explanation for the rational behind his decision to increase minimum wage of State Government workers from N40,000 to N70, 000 in Edo State.
Obaseki spoke in an interview on Channels Television’s Politics Today on Monday.
Recall that prior to the announcement of the N70,000, Obaseki paid N40,000 as against the N30,000 national minimum wage.
Giving explanation, the governor said with the depreciating value of the country’s currency – the Naira – and the rising cost of living, it made sense to introduce a new minimum wage for state workers.
“Let us understand this new minimum wage calculation. In 2011, when the minimum wage was N18,000, the exchange rate was N160/$ and so effectively workers in Edo State were taking home about $120 as minimum wage.
“When we increased the minimum wage to N40,000 in 2022, the exchange rate at that time was N450/$ so effectively, workers were getting about $96.
“Today, 2024, with the N70,000 minimum wage at the current exchange rate of N1,257/$, what they are taking home is $55 which is less than 50 per cent of what they were earning about a year ago.
“For us in Edo State, we believe that the issue is about productivity; paying people well so that they can produce more and not pretending that you are paying them some salary when you know that that salary cannot motivate them to produce the goods and services that you require.”
Obaseki said his government had to introduce the new minimum wage for workers in Edo State to reflect the current economic realities of the country.
He said, “We are taking measures as a state to mitigate the situation that we found ourselves in today.”
He said with the digitisation of work in the state, the government has been able to save money which will be channeled to other areas including the payment of wages.
“So, we don’t spend money on stationery and all those costs used to run the government,” he said.
The governor added that the state has also reduced the cost of energy by looking at alternative sources.
“Those savings, I use them to pay salaries,” he said.
Meanwhile, political reactions have trailed Obaseki’s announcement.
The Labour Party in Edo State in reaction on Monday said that the new minimum wage of N70,000 announced by Godwin Obaseki was political.
Edo State chairman of the Labour Party (LP), Kelly Ogbaloi told Vanguard on phone late Monday that the governor was not sincere with the award alleging that he was using it to lure workers and there is no assurance that the next government would continue the scheme.
According to him “It is an award to the workers. It is okay but again isn’t it political? These workers have suffered tremendously in the past, this realization of increasing salary is coming from where? Is that not just a joker so that workers can be cajoled or eroded into believing that the next government that is from him will be better? I think the award is more deceitful than reality.
“They could award that but the intent is my problem, because workers have been on a particular wage for a very long time and government has been severely insensitive to considering it and as soon as elections are eminently here, election has become ominous, then government is rushing to increase salaries to N70,000 from whatever rate it was before.
“This is a government that is leaving soon and so what are the chances that the next government will sustain it when it is no longer there and then what are the legalities of the new offer, what are the things that required law for salary increase be allowed to work so that successive governments can see it as a basis which they will develop on when the government changes?”, he queried.
He said further, “Whatever it is, he is living and what we are sure of is that the next government is certainly not going to be PDP. So, for me, I will conclude by saying that it appears like a charade because it is coming when election issues are here, it is a little bit political.”