Workers – government wage relations and the unresolved issue of income inequality and labor strikes in Nigeria : Suggestion for the way forward

Generally speaking, employees in all kinds of work organizations (private or public) exchange work for rewards, which take many forms (that is, material and non-material rewards). However, one of the most important of such rewards and invariably the most obvious is the money paid to workers either as salaries, wages or monitored fringe benefits. The importance of this group of reward lies in the fact that it constitutes the regime of benefit which impacts most greatly on the employees’ motivation to work and on their propensity to cooperate with the management thereby creating a stable industrial relations environment. Its management thus becomes an important issue in all manners of industrial relations system. In Nigeria, the administration of industrial compensation is always associated with a number of industrial relations related problems, the most important which are income inequality and industrial conflicts in form of labor strikes. This paper suggests some ways forward which include: the adoption of job-evaluation system in the fixing of salaries and wages; adoption of the principles of Human Resource Management (HRM) in the management of workers; and introduction of welfare schemes for workers to reduce income inequality.


INTRODUCTION
Historically, there is a widespread interest in the role of money as a motivational tool for spurring people for higher productivity and for securing their allegiance to cooperate with the organizations in which they are members.This kind of interest was first stimulated by the ancient Greek philosophers like Hypocrites, Plato and Herodotus.In their pioneering works, they provided the foundation for discussion of money as a motivator in industrial compensation (Salawu, 1995).In summary, they believed that in acting, human beings usually seek for comfort and pleasure, while at the same time avoid discomfort and pain.This philosophical thinking is what is generally referred to today as the hedonistic conception of man, which eventually became the basic assumption in the prevailing economic and social philosophies of such famous men as Jeremy Benthem discussed in Bowring (1962); Mills J. S. discussed in Robson (1963); and Adam Smith (1835).In the classical economic theory championed by these men, they thought that the main goal of workers is the achievement of hedonistic satisfaction and maximization of his pecuniary income.Thus, monetary or financial compensation (wage or salary) is seen as a major influencer of work related behavior (Salawu, 1995).For example, Adam Smith, arguing in the context of the above, said that in acting, there is no sacrifice too much for workers in order to *Corresponding author.E-mail: drsalawu@yahoo.com.Tel: +2348033530779.achieve higher wages.Similarly, Taylor (1923) in his scientific management theory emphasized the relationship between financial compensation and the extra effort put forth by the workers in the performance of their jobs.Specifically in this regard, Taylor (1923) emphatically remarked that workers will put forth extra efforts on the job in order to maximize their economic gains measured in terms of higher wages.The interpretation of this is that money is a great motivator of work behavior.
From these pioneering works, a number of scholarly works now exist to establish a linkage between human needs (particularly, money) and work behavior.In the 20th Century, for example, establishing an explanation of such linkages constituted an area of interest to many industrial researchers like March and Simon (1958); Wanons (1973); Porter and Steers (1973); Oloko (1973); Lock (1976); Nicholson (1984); Dalton et al. (1977); Oloko 1977;and Edwards (1979).
In order to illustrate the linkage between monetary rewards and work behavior as contained in the above cited works, the work of Lindahl (1949) provides a good starting point for a discussion on this issue.In his empirical study, Lindahl attempted to find out what workers actually seek from their jobs.This, he did because he believed that what workers seek for would in turn motivate their behavior in the work organizations in which they operate.Lindahl's work revealed that while supervisors thought that workers ranked good wages, job security, promotions and good working conditions as things that motivate them, they themselves ranked full appreciation for work done and sympathetic understanding of personal problems as the things they actually want form their jobs.
The work of Porters and Lawler (1965) is another attempt to test the validity of some of the scholarly works (that is, theories of motivation of the 20th century).In particular, their work attempted to test the validity of the five-reinforcement needs assumption in Maslow's Theory.They concluded that there are two types of reward namely: intrinsic and extrinsic rewards (Salawu, 1995).In this empirical work, Porter and Lawler claimed that intrinsic rewards include feelings of accomplishment and satisfaction of higher needs, while extrinsic rewards are increased pay, promotion, job securities etc.A very useful study following the works of Lindahl and Porter and Lawler is a survey conducted by the U.S. Department of Agriculture and the War information survey office on employees of some war industries.Results of the study show that respondents ranked wages, followed by effective and impartial promotion as their most highly valued motivating items.
The muddy water study conducted by Oloko (1973) is yet another study specifically designed to test the Maslow hierarchy of need theory among some Nigerian workers.In this study, Oloko carried out an extensive socio-psychological survey of factors, which influence the extent to which employees discharge their role obligations in ways that would enhance the effectiveness of the company.The results of this study show that the organizational components such as promotion, job security and salary are the dominant reinforcers for Nigerian workers.The work of Di-Dominico (1973) on the recruits of the Nigerian tobacco company at Ibadan is another study that shows that the Nigerian workers had an instrumental attitude to work.What this means is that they emphasized money and wages as the primarily movers of their behavior to join and remain with the organization.
From the various works reviewed above, one can conclude that in their own way, these 20th century scholars were able to show among other things that pay or wage constitutes an important aspect of industrial relations which either helps to maintain or destroys it depending on the way and manner it is managed.In this paper, we intend to examine the history of workersgovernment wage relations in Nigeria and the resulting income inequality and incessant labor strikes that usually heat up the Nigerian industrial relations environment.The paper then suggests some of the ways by which the unresolved issue of income inequality and labor strike can be resolved and therefore serving as coolant for the industrial relations system in Nigeria.To achieve this, the remaining part of this paper is divided up into the following sections: the history of wage problem and its administration in Nigeria a review; evidences of income inequality in Nigeria; suggestions for the way forward; and conclusion.

The history of wage problem and its administration in Nigeria: A review
Wage agitation between workers and government and its final determination have a long history in Nigeria.However, to properly understand the history of wage agitation in Nigeria, the cost-of living award (COLA) agitation of 1941 provides us with a good stating point for the discussion of this issue.Even though, there might be other workers' protests before on the welfare of the workers as it was the case with the 1941 COLA agitation, indeed, the COLA agitation has been seen in many quarters as an offshoot of the economic difficulties created by the British government involvement in the prosecution of the Second World War.This economic difficulty as it turned out to be affected the working class more than any other sectors of the urban centers.Thus, because of the economic hardship caused by war prosecution and suffered by the working class, the railway unions demanded a cost-of-living award in 1941.The workers' demand was turned down and a crisis resulted.In order to deal decisively with the situation, the government set up a committee to look into the circumstances surrounding the workers' agitation.Following from the committee's report, the government granted a costof -living allowance (COLA) to all its workers.
Thereafter the COLA award, a number of other trade unions emerged in the Nigeria industrial relations system to agitate for and get the COLA allowance.
The general strike of 1945 is another wage agitation that brought the government face to face with the Nigerian workers and which again resulted in wage movement for the Nigerian workers.Discussing the circumstances that led to the strike, Ubeku (1983) mentioned the economic conditions of the post war period, which became harsher.In order to ameliorate these harsher economic conditions, the unions simply capitalized on the success, which they recorded in an earlier agitation (the-COLA agitation) to demand for a cost-of-living increase over the awards made by the government in 1942.As usual of the government, the workers' demand was refused and a general strike was called by the workers.Like the 1941 COLA agitation, the railway unions engineered the general strike of 1945.The strike was also adjudged to be successful.In his appraisal of the success of the strike Ubeku (1983) observed that the strike, which lasted forth-five days, was successful in its economic aims to the extent that all economics activities were paralyzed and the government was forced to appoint the Tudor Davies commission.On the basis of the commission's report, the government awarded substantial increases based on the cost-ofliving.One important thing about the 1945 workers strike, which is worthy of mentioning here is that it has a farreaching implication on the wage increase procedure in Nigeria.At least, the near-unilateral determination of wages and salaries by employers which characterized the era before the general strike of 1945 seemed finally to have been ended.That is, the existing unions could now regroup to form countrywide trade unions that would present well-reasoned memoranda to any commission set up by the government.This situation continued till the country gained her independence in 1960.
After the independence, the trade unions in Nigeria have continued to be at the center of wage agitation.For example, the Trade Union Congress of Nigeria (TUCN) and the Nigeria Trade Union Congress (NTUC) had in 1961, presented memoranda to the Federal Government pressing for two main issues.These are; (1) a review of wages and salaries and (2) regrouping of all the house unions into twenty-five industrial and general unions.On the issue of wage review, the ULC and NTUC specifically demanded for the introduction of a national minimum wage.The two demands were vigorously pursued by the Joint Action Committee (JAC) formed in September 1963 by all factions of the existing trade unions.The resulting strike action from the 1963 wage agitation involved more than 34,513 workers with 76,006 man-day loss (Ubeku, 1983).The magnitude of the strike led the Federal Government of Nigeria to appoint a commission of inquiry to look into the demands of the striking workers.This was Mr. Justice Morgan commission.Although, the strike dragged on until 13th June 1964, the workers also gained substantial award from the strike action.
Since the 1963 general strike which lasted till 13th June 1964, pent-up wage demands usually find expression in strike action, which is more often than not followed by the establishment of wage tribunals.What this means is that the establishment of wage tribunals only after major workers'; protest still characterizes the post-independence industrial relation in Nigeria (Otobo, 1987).Prominent among such post-independence wage tribunals are the Adebo commission in 1970-1972; the Udoji commission in 1974; the Onosode commission for Federal parastatals in 1981; the Cookey commission of universities in 1982 etc.As stressed earlier, these commissions were creation of the aftermath of industrial strike actions embarked upon by workers.That is, through their strike actions, the unions were, in most cases, able to put political pressure on the government, which as a result, led the government to set up these tribunals.From the foregoing, it can be seen that practically, every major demand on the part of workers for wage increase or review before and after independence in Nigeria has been settled not through collective industrial machinery, but by special commissions or tribunals.These tribunals might have helped to raise wages in Nigeria they have not addressed the problem of income inequality in the Nigeria industrial relations system, which remains a major source of industrial instability.This issue still remains unresolved even with the establishment of a permanent wage commission in Nigeria that is charged with the administration of all wage issues.
The 1991 wage policy of Babangida's administration, which introduced deregulation and decentralization of collective bargaining, particularly in the area of wage administration or industrial compensation, has not solved the problem either.Instead, it has contributed significantly to the accelerating pace of industrial dispute in Nigeria.In fact, this policy of deregulation and decentralization is seen in many quarters as a return to the draconian and chaotic industrial relations atmosphere of the past.Indeed, with the take off of the policy, no sector of the Nigeria economy has been spared from the industrial disputes that characterized the entire national economy.This pathological industrial relations situation is articulated in an editorial opinion of Vanguard News Paper (1994) thus: …at a stage, it (industry dispute) became a baton relay race where trade unions were exchanging strike baton with one another.Within the University setting (

for example), we could see the Academic Staff Union of Universities (ASUU) exchanging strike baton with the Senor Staff Association of Nigeria Universities (SANU) and the Non -Academic Union (NASU)…
Other unions that have joined the strike race in Nigeria are National union of Petroleum and National Gas (NUPENG); Although the declaration of industrial disputes by unions in any industrial relation system could be attributable to varying factors or demands, pay has always been singled out as the most important demands.Its administration remains one of the major management functions, which determines the condition of industrial relations of a country.The spate of industrial disputes in the Nigerians economy seems to suggest that the wage determination policies by the Nigerian governments before and after independence were and still are administratively inadequate as the most visible characteristics or features of the Nigeria industrial relation system today remain income inequality and incessant industrial labor strikes.

EVIDENCES OF INCOMING INEQUALITY IN NIGERIA
Interestingly, equitable income distribution and of an egalitarian society have become important objectives of development policies in the 1970s.In fact, the second, third and fourth -National Development Plans (1970 -1974; 1975 -1980; and 1981 -1985) respectively placed emphasis on the promotion of the balanced development among various communities.All that this indirectly indicates is the need for an egalitarian society where there is fair play and equitable income distribution.
To create such an egalitarian society with regard to income equality, the employer employee wage relation is very important.From our analysis of the situation in Nigeria so far, it has been shown that the country has been characterized by incessant wage agitation by the unions and the use of wage tribunals by the government to douse the tension.This practice of relaying on wage commissions as pointed out earlier, has not resolved the problem of income inequality in the Nigeria industrial relations system.In an attempt to assess the use of wage commission system as mechanism for ensuring equitable income distribution among the Nigerian workers, Fashoyin (1980) described the system as a complete disaster as such system, according to him, has only contributed to income inequality in the Nigerian economy.By way of example, such income inequality in the economy is found in many scholarly publications.Ndiomu and Eronini (1975) presented a fairly comprehensive study of incomes on sector basis.Their findings indicate that there is a great inequality in the income of agriculture and industrial sectors (notably manufacturing).Assessing Ndiomu and Eronini's finding, Fashoyin (1985) adjudged their analysis as very informative because it gives a fair assessment of the pattern of income differentials in the modern sector.Fashoyin thus maintained that although wage employment is small in both sectors, the analysis still indicates the extent of wage differentials between the two sectors in Nigeria.
The Academic Staff Union of Universities' (ASUU) publications of 1995, 1997, 2000 and 2009 also indicate the kind of sectorial wage differentials in the Nigerian economy as discussed above.In all their releases the union made efforts to compare the salaries of the university lecturers with other workers in some other sectors of the economy like the public sector of the economy such as the oil, iron and steel sectors.In all their publications, the Academic staff union attempted to show that in the Nigerian economy, the 'toughest' gets the 'roughest'.A critical look at the data presented in Table 1 shows that those who are supposed to receive high salary because of their superior skills in term of education, experience, effort in term of physical demand, mental and visual demand their responsibility in terms of equipment or process, material or product, safety of others and work of others, and their job conditions in terms of working conditions and unavoidable hazards now receive less salary.
Although, there is a general salary increase in the salaries of workers in various sectors of the Nigerian economy today, the inequality in salary distribution still remains a feature of the country's wage distribution pattern.In one of the ASSU's publications released in 2000, it was specifically pointed out that a wide range of inequality in salaries exists among the Nigerian public workers.In the publication, it was shown that the basic salary of a Nigerian professor at bar was not as much as the salary of a middle manager II in the National Electrical Power Authority (NEPA) and a Lecturer II' s basic salary was close to that of a junior staff in NEPA.A professor's transport and utility allowances were 50% (half) that of middle manager II in NEPA.Again, a professor's entertainment allowance was just about 26% of NEPA's senior manager.Similar patterns hold in NITEL, Shell, NNPC, CBN and other banks.The pattern of income distribution in 2000 is yet to change significantly even today.The income inequality discussed above will be more appreciated if we look at what the situation was before the Udoji award (a salary increase awarded by Udoji salary review commission) in the early 1970s.Before that award, the highest paid public officer in Nigeria was the Chief Judge of the Federation (CJF), followed by the professor who earned the same as the Justice of the Supreme Court, Followed by associate professor earning the same as permanent secretaries and directors who earned the equivalent of a lecturer I salary.Today, the situation is worse to the extent that a first degree holder who secures a fresh appointment in a bank earns more the one hundred thousand naira (N100, 000.00) a month while his counterpart in the federal or state employment earns less than fifteen thousand naira (N15, 000.00) a month.
There is no doubt that the discussion above indicates some kinds of mal-distribution of income in the Nigerian economy, which of course has not helped to enhance peaceful industrial relations environment in Nigeria.Most industrial agitations as we have shown earlier always have at their center, wage related issues and which in most cases have culminated into serious industrial crisis and further dissatisfaction among the Nigerian workers.

SUGGESTIONS FOR THE WAY FORWARD
It is important to note that for most industrial relations system, even those in hightechnology societies, the major operating costs are those associated with their human resources.This explains why in times of economic crisis, it is not surprising that the first area that management examines with the objective of cutting costs is the workforce.In fact, this is a message that has not been lost on managements.By and large, employees are seen as the largest operating cost, the most important resource, and above all the one that requires greater attention and increasingly cost-effective relations system, the question of how to build a satisfied workforce becomes a very critical issue in personnel management.There is no doubt that doing this will mean looking beyond the traditional scope of collective bargaining as an instrument for improving the standard of living of employees.Thus, over the last decade or two, there has been a shift of interest and emphasis towards these broader, non-traditional issues.Salawu et al. 65 Since the national objective in Nigeria is to reduce income inequality, this paper is suggesting that the government in Nigeria should pay attention to the following key areas: First and foremost, there should be conscious adoption of human resources management (HRM) principles in the management of Nigerian workers.Since the method of collective bargaining (particularly the use of wage commissions) is resulting into unequal income distribution thereby affecting employees' welfare, there is now an increasing need for a reassessment of industrial relations theory as well as practice in favor of human resources management practice.This reassessment should be directed towards ideas and method through which the standard of life and well being of employees at work can be improved without resorting to the old methods of industrial relations.The objective here is to cool down the temper that has been charged by the adverse economic conditions in Nigeria, which always result to workers agitation and further income inequality if award is made at all.
In this new attempt to improve the standard of life of the employees at work through the use of HRM, the Nigerian government through relevant agency should pay attention to the employees' right to be consulted and involved in a range of routine, tactical and strategic decisions, particularly those that affect wage matters.In the context of the Nigerian situation, some of the area in which a proper application of human resource management model can be useful in creating a peaceful industrial relations environment, which as earlier said is dangerously threatened by frequent wage agitation and the traditional use of wage commission to dowse the tension may include: (1) the labor relations area and (2) the area of compensation and benefit.
On the first area, that is the labor relations, it should be understood that the success of every government rests on effective and peaceful industrial relations.With the present economic situation, demands by unions or employees for improved salaries and good conditions of service will be at the centre of industrial relations.Consequently, industrial conflicts as they are already in Nigeria may continue to be the order of the day.These conflicts may be resolved by putting into practice the principles of human resources management.On a more specific note, their resolution may require a lot of tact, skill and 'give and take' from the various groups.If this is done, it will keep the industrial climate reasonably healthy.On the second area, which borders on compensation and benefit, there is need for the Nigerian government to do a comprehensive comparative studies and analysis of compensation and benefits in the various sectors of the economy.The pay structure and benefits have to be competitive.Pay for performance as against general increases should be emphasized and protected so as to secure the confidence of the Nigerian workers.The second major way out is adoption of job-evaluation system in the determination of employees compensation scheme in Nigeria.According to the international Labor Office (ILO-1969), job evaluation is a method which helps to establish a justified rank order of job as a whole as a foundation for setting equitable wages for the workers of various categories.From the above, job evaluation may imply a method of pay administration, which relates the amount of pay a person receives to the demands and requirements of the person's job.The view of job evaluation provided above presupposes that the more complex the job is and the more demands the job puts upon the incumbent, the higher the level of pay provided to the person performing the job.The purpose of jobevaluation therefore, is to assists in relating pay to the demands of job a person performs with the hope of creating a sense of equity in the person performing a particular job when he compares himself with others in their kinds of job.
The concept of job evaluation is not new in Nigeria.While the past and present governments in Nigeria have been used to setting up of committees or commissions to fix salary and to increase wages in response to either popular industrial agitation or as reaction to the rising cost of living, some of them did recommend proper job evaluation to the government that set them up.In actual fact, some even did something close to jobevaluation.The most unfortunate thing in Nigeria as far as wage determination is concerned however, is that up till now there is no formal legislation to enforce the use of jobevaluation as it is the case in U.S. and Britain.This is inspite of the fact that the assignment given to these wage commissions cannot be accomplished without recourse to the use of job evaluation procedures.For example, the Morgan commission was asked to look into the following at its inauguration; To investigate the exiting wage structure, remuneration and conditions of service in wageearning employment in the country and to make recommendations concerning a suitable new structure as well as adequate machinery for a review on continuing basis (Fashoyin, 1980).To understand with the aid of appropriate grading teams, the re-grading of all posts in the public services, establish scales of salaries corresponding to such grades and, a s a result of job evaluation of posts, recommend salary to be applicable to each post in the services (Fashoyin 1985).
A critical look at or interpretation of the two terms of references cited above show that each has a dose of job evaluation objective.This means that each commission has an assignment to do some job analysis, job description and job specification within the objective of fixing salary of the Nigerian workers.This explains why some wage/salary commissions grading teams like Adebo and Morgan commissions included as part of their recommendations to the governments that set them up the need to set up another committee to carry out 'proper' job-evaluation.Though, very importantly, this aspect of commission's recommendation has conventionally been ignored in the government white papers that usually follow such committees' report.
If therefore all the reports of various committees set up by governments between 1934 to date, and the white paper that emerged from such reports, are put together, it would be seen that the Nigerian's system of remuneration that has become more or less established is the one based on the concept of an approved scheme of service (ASS).In this system, the administrative class is divided into grades, each of which is assigned posts, which are considered to be of the same level of complexity and responsibility.Inspite of the closeness of the approved scheme of services (ASS) used by the Nigerian government to the system of job evaluation, this system of grading in Nigeria as discussed above does not seem to have given much attention to the need for a clear cut distinction between the work performed at different levels, which would justify the salary scales attached to the different levels.Hence, the persistence of income inequality among the Nigerian workers which breeds dissatisfaction and low work productivity among them.Therefore, the introduction of Job evaluation as a method of pay administration which relates the amount of pay that a person receives to the demands and requirement of the person's job is meant to create a basis for pay equity and to reduce the frequency of industrial troubles in Nigeria.The third major way out of the problem of income inequality is deliberate introduction of welfare schemes for the Nigerian workers.Apart from payment of salaries/wages to the Nigerian workers, the successive governments in Nigeria pay little attention to the use of welfare packages to eliminate income inequality among the Nigerian workers.Welfare system in organizations is seen as a benefit in form of extra income, an additional security and of course more desirable working conditions (Ubeku, 1976).Two of the major characteristics of benefit that derives form welfare system is that it does not require additional effort from the employee and it satisfied employees needs and wants which are mostly satisfied by wage and salaries (Olawoye, 2000).Many scholars have discussed the importance of welfare scheme in the management of organization (Ubeku, 1976;Armstrong, 1991;Owen, 1813, Oguniyi, 1991).The bottom line is that an introduction of some welfare scheme will eliminate to some extent the economy hardship that may be suffered by some categories of workers particularly the lowly paid ones and therefore help to bridge income inequality to some level.

CONCLUSION
This paper has examined the problem of wage administration and the unresolved issue of income inequality and labor strikes in Nigeria with a view to suggesting some ways out of these unresolved problems.Starting from a theoretical stand point that emphasizes the importance of pay, and its administration in industrial relations, the article argued that the practice of fixing wages through the use of salary review commissions and grading teams has continued to lead to income inequality among the Nigerian workers and frequent labor unrest resulting from perceived income inequality.The paper also argued that the use of approved scheme of service as a method of fixing wages is counter productive as it has not been able to relate the amount of pay a person receives to demands and requirements of the person's job, which results into income inequality in the Nigerian industrial relations system.In order to resolve these unresolved issues, therefore, the following measures are recommended; (1) Adoption of HRM principles in the management of the Nigerian workers; (2) Adoption of jobevaluation systems in fixing the salaries and wages of the Nigerian workers; and (3) injection of welfare package into the motivation scheme for the Nigerian workers.If these measures are adopted, it is hoped that in the long run, a stable industrial relations environment will be achieved and maintained.

Table 1 .
A Comparison of average salaries in different sectors of the Nigerian economy.