My reason for increasing minimum wage to N70,000 — Obaseki

The Edo State governor, Godwin Obaseki, provided justification for his decision to raise the minimum wage from N40,000 to N70,000.

Obaseki made remarks during a Monday interview on Politics Today on Channels Television.

Remember that Obaseki paid N40,000 instead of the N30,000 national minimum wage previous to the announcement of the N70,000.

The governor stated that it was reasonable to establish a new minimum salary for public employees given the declining value of the naira, the nation’s currency, and the growing cost of living.

“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,  government has been able to save money which will be channeled to other areas including the payment of wages.

“So, we don’t spend [so much] 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.