Labour costs of COVID-19: Matters arising

By Funmi Komolafe

Labour costs of COVID-19: Matters arising
EXPECTEDLY, Nigeria joined other nations to effect a lockdown to prevent the spread of COVID-19 that has claimed lives in hundreds in many developed countries. In many countries, the International Labour Organisation anticipates economic and social costs, as we are experiencing in Nigeria right now.

The International Labour Organisation warned: “The eventual increase in global unemployment during 2020 will depend substantially on future developments and policy measures. There is a high risk that the end-of-year figure will be significantly higher than the initial ILO projection, of 25 million”.

For us in developing countries like Nigeria, the ILO noted, “Workers and businesses are facing catastrophe, in both developed and developing economies.” According to ILO Director-General Guy Ryder, “We have to move fast, decisively, and together. The right, urgent, measures, could make the difference between survival and collapse.” ILO, the oldest organ of the United Nations described the current pandemic as the greatest test for international cooperation in more than 75 years.”

According to ILO director-general Mr. Guy Ryder,“if one country fails, then we all fail. We must find solutions that help all segments of our global society, particularly those that are most vulnerable or least able to help themselves.” In Nigeria, the formal and informal sectors have become non-functional. Businesses have ground to a halt. Those who live on daily earnings, are barely surviving. Families are groaning and growing through serious social and economic tension.

In the formal sectors, companies have shut down, production has stopped. Machines and human beings are lying idle. For those in the civil service the bulk of the working class have been asked to stay away from the offices. We are staying away from the work places in order to stay alive. Only the living work, so the stay at home is in order. However, the stay at home order has thrown up series of labour issues that employers, government and trade unions need to address or begin to work towards resolving those issues.

State governors asked workers to work from home but the reality is that this is impossible. How many state government offices are computerised? How do files move from one table to another? Taking files home does not produce any result as no action can be taken. In any case, it is not allowed. Work in the civil service is a chain so work remains still. Worse still even for civil servants who are usually assured of regular pay monthly, with Nigeria earning far below expectation, how much will be paid at the end of the month?

Already, some of governors have indicated inability to pay the recently negotiated national minimum wage because of the reduction in federal allocation and internally generated revenue. How does Organised Labour react to this? For those in the informal sector, the situation could be worse. How does the manager of a saloon or a boutique, or a barber whose business has been shut for two weeks pay his employees at the end of the month?

Would it be a case of half pay or no pay? The small-scale employer could argue that since there is no income, there would be no pay. Yet this class of workers belong to the lowest paid in the strata of society. Many of them earn below the minimum wage of N30,000 per month. Indeed the National Minimum Wage Law exempts employers with fewer than 50 workers from paying the negotiated national minimum wage. Some earn as low as N15,000 and are just pleased that they have a work place to resume daily. Usually, these categories of workers have no pension or any form of insurance. This is not peculiar to Nigeria; it is common to many African countries.

ILO states: “worldwide, two billion people work in the informal sector (mostly in emerging and developing economies) and are particularly at risk”. Who speaks for these workers? How far can the trade unions or non-governmental organisation that organises workers in the informal sector go?

For the small-scale employer also, this certainly is not the best of times. In spite of the business that has been closed, the manager will still have to pay local government taxes, pay for electricity, shop rent, maintenance charges, etc. None can be wished away on the altar of COVID 19. These bills must be settled. Usually, this class of employers hardly makes enough to save part for investment. Even where money is saved, it is usually re-invested as traders are more interested in faster turnover.

For the labour force those in the formal sector, this is a period that puts managerial skill to task. Will employers need to negotiate with unions to decide what to pay workers? Are employers bound to pay full month salaries for only two weeks of work? In all sectors, the purchasing power of the wage earner has been seriously eroded. Businesses that were allowed to operate such as food stores and pharmacies, increased prices by as much as 200 per cent. The only area in which there seems to be some form of relief is the reduction in the pump price of petrol from N145 per litre to N123 per litre. Even at that, because there isn’t mass movement, the reduction has not made any significant impact on our economy.

For the vast majority of our people in the cities and the rural areas, the cost of kerosene that is used by the most people remains high at N230 per litre. Prices rise, purchasing power falls. The amount lost by the entertainment industry can only be estimated at millions of naira as social life has been completely shut down with social distancing. As stated by the ILO, “the sectors most at risk include accommodation and food services, manufacturing, retail and business and administrative activities”.

The ILO in its study wrote: “Huge losses are expected across different income groups but especially in upper-middle income countries (7.0 per cent, 100 million full-time workers). This far exceeds the effects of the 2008-9 financial crisis…worldwide, two billion people work in the informal sector (mostly in emerging and developing economies) and are particularly at risk”.

Sudden loss of income

With these alarming figures how do we get millions of Nigerians affected by COVID-19 work closures back to work? The ILO, according to its studies, states: “1.2 billion workers are employed in the sectors identified as being at high risk of ‘drastic and devastating’ increases in lay offs and reduction in labour wages and working hours. Many are in low-paid, low-skilled jobs, where a sudden loss of income is devastating”.

In our situation, crime has been on the rise. Miscreants are already taking advantage of the situation to loot shops and commit crimes. At a time like this, the cooperation of the tripartite social partners: government, employers and unions are necessary with greater sense of responsibility. In Nigeria, commendation must go to health workers who have been working to save lives. On the part of government too, senior government officials elected and appointed have been working almost 24 hours. Security agents have also been seen enforcing the rule and tackling crime.

Although some have overstepped their briefs by maiming or killing citizens who do not stay at home, which is unfortunate, though, higher authorities in the security agencies have taken this up. Many private sector employers have offered social relief in terms of money, food items, medical equipment, etc. Religious organizations have also been quite impressive. Many have complied with the social distancing order that means loss of income for them but even at that, many religious organisations have made astonishing donations to the hospitals and many homes. What is needed at a time like this is that we all bear some form of economic and social deprivation is solidarity.

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Geneva-based ILO suggested “collective efforts and solidarity between employers’ and workers’ organisations is critical to respond effectively to the impact of work”. Its new states, “COVID19 has in many parts of the world jeopardised the health and safety of millions of people and put immense pressure on businesses, jobs, and livelihoods.

In crisis settings, collaboration and dialogue between employers and business membership organisations, EBMOs, and workers’ organisations can boost economic and social progress and enable accelerated recovery”. In the study titled, “Managing Conflicts and Disasters: Exploring Collaboration between Employers’ and Workers’ Organizations”, the ILO’s director for Bureau of Employers Activities, ACT/ EMP, Deborah France-Massin said “Business leaders have a vested interest in peace and stability and in being well prepared for crisis situations”.

For trade unions, she suggested, “Unions, in turn, have a huge mobilization potential through their members; either to lobby for legislative and constitutional changes in favour of the workforce, or act swiftly and effectively when humanitarian assistance is required”. COVID 19 presents an opportunity for an unusual but long lasting cooperation between the social partners of Government, Employers’ and Workers’.

Komolafe is a former Labour Editor with Vanguard.

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