Governor Godwin Obaseki recently defended his decision to increase the minimum wage from N40,000 to N70,000 for workers in Edo State. During an interview on Channels Television’s Politics Today, Governor Obaseki addressed the rationale behind the wage hike, citing the devaluation of the naira and the escalating cost of living.
Before the new N70,000 minimum wage was announced, Governor Obaseki had already raised the minimum wage from N30,000 to N40,000 in Edo State. He explained that with the weakening value of the country’s currency and the steady rise in living expenses, it became imperative to adjust the minimum wage accordingly.
Governor Obaseki elaborated on the calculations behind the new minimum wage, comparing it to previous benchmarks. He pointed out that back in 2011, when the minimum wage stood at N18,000, the exchange rate was approximately N160/$, resulting in workers in Edo State effectively earning around $120 as minimum wage. However, by 2022, when the minimum wage was increased to N40,000, the exchange rate had surged to N450/$, diminishing workers’ earnings to about $96.
Fast-forward to 2024. With the new minimum wage set at N70,000 and the current exchange rate at N1,257/$, workers are now taking home approximately $55, which represents less than 50% of their previous earnings just a year earlier. Governor Obaseki stressed that it’s essential to ensure fair compensation for workers to boost productivity rather than merely providing salaries that fail to motivate them to deliver the desired level of output.
Governor Obaseki justified the increased minimum wage by highlighting the need to align with the country’s current economic realities. He affirmed his government’s commitment to implementing measures to address the challenges posed by the economic situation.
One such measure involves the digitization of work processes in the state, which has led to significant cost savings. Governor Obaseki explained that by reducing expenditure on items such as stationery and other administrative costs, the government can allocate more funds towards paying salaries.
The state government has also pursued initiatives to reduce energy costs by exploring alternative sources. These cost-saving measures have enabled Governor Obaseki to allocate resources towards meeting the increased wage bill while ensuring financial sustainability.
In summary, Governor Obaseki’s decision to increase the minimum wage in Edo State reflects a proactive approach to addressing workers’ economic challenges. By acknowledging the impact of currency devaluation and rising living costs, Governor Obaseki has provided fair compensation to workers, fostering productivity and ensuring their economic well-being.
