The Politics of Minimum Wage in Nigeria’s Fourth Republic: Implications on Poverty Reduction

Why do most capitalist states fix minimum price for labour whereas prices of other commodities are determined by the market? This paper is an attempt to address this question by interrogating the centrality of the state in the minimum wage fixing process and the effectiveness of minimum wage as a poverty reduction strategy in Nigeria’s Fourth Republic. Within the last two decades, the minimum wage in Nigeria has been reviewed severally without corresponding improvement in the material existence of many low-income wage workers. Using the Marxian wage theory and qualitative data derived largely from key informant interviews and documentary reviews, the paper finds that minimum wage is not an effective poverty reduction strategy in Nigeria as market distortions such as inflation and taxes always erode the gains of increased wages, especially for low-income workers. Generally, many low-income workers in Nigeria can hardly reproduce themselves and their families based on wage work and are therefore largely enmeshed in poverty. Therefore, the paper recommends that the federal government needs to institutionalize a wage fixing mechanism to review wages in line with existing economic realities as well as formulate a price fixing policy for essential commodities to check arbitrary inflation in the country.