I) INTRODUCTION: In most deregulated economies central labour organization (CLO) exist and do exert a great influence on the functioning of the labour market, price level and government decisions through various strategies, such as collective bargaining and strikes. Strikes come when collective bargaining has failed. As observed only 2 to 4 percent of all negotiations result to strikes and most of these last less than two weeks. Although most strikes centre on disagreements about labour market, price level and government monetary/fiscal decisions. Others include union organization and security, work rules, safety, and job security disputes. In every economies, almost every trade or profession is unionized. You can name hundreds of them, therefore, this unification constitute what is known as central labour organization ( in Nigeria it is called Nigeria labour congress, NLC). That is, these unions are affiliated to central labour organization (CLO) as observed. However, this paper is aimed at exposing how activities of organized labour, which geared towards improving the welfare of the union have affected the economic situation of the nation.
II) AN OVERVIEW OF ORGANIZED LABOUR HISTORY IN NIGERIA: The history of organized labour union in the country has been characterized by continuous oscillatory unity and division in 1938 to 1978 when present Nigeria labour congress was decreed into law. This was as a result of pressure from workers themselves and global tendency. Though before the decree, there was a trade union tribunal in 1976 and thereafter, trade union Act in 1977. this Act gave right to the establishment of organized labour union in Nigeria in 1978. The trade union Act of the federal government of Nigeria provides that: i) Upon the commencement of the Act, NLC shall be the only central organization with power as specified in section 34. ii) It shall be an offence for any trade union not specified in part A of the schedule to affiliate with central labour organization. This implies that it is unlawful to have another CLO other than the NLC and Senior Staff Association can not organize under a CLO (excludes senior staff workers from having own CLO).
III) STRIKE AND COLLECTIVE BARGAINING AS LABOUR UNION TOOLS: Strike and collective bargaining are strategies employed by labour union to raise wages, improve worker’s working condition and influence government decisions that are hostile to the union. In a system where strike is outlawed, union through collective bargaining seeks higher wages and better working condition for their workers. However, the power that control a union may have other goals such as job security for union officials. Thus, limiting bargaining. Hence, all we can say at this juncture is that bargaining tends to be in favour of the party (union or employer) with the greatest power or bargaining savvy. However, strike and collective bargaining may co-exist. When collective bargaining failed, labour will now employ their ultimate weapon of the union, which is strike. The onset of strike is a signal that union workers demand much than employer is willing or decision of the employer is hostile to the welfare of the employees/labour. As time elapses, labour becomes willing to settle for less as their financial position fall, while employer is also willing to raise its offer or withdraw it decision, as stakeholders and the general public apply pressure to settle. Declining demand and rising offer/withdrawal of decision intersect to signal the end of strike. Therefore, strike, the big stick of the union is an action of unionized employees/labour whereby they simultaneously discontinue working and prevent other potential workers from offering their services to the employers. The purpose of strike is to impose economic costs on the employer, coercing him to accept the proposed terms of the union (Ekanem and Iyoha, 1999).
IV) ECONOMIC EFFECTS OF LABOUR UNION ACTIVITY IN NIGERIA: Despite what have been discussed in the foregoing sections as regards to the impact of organized labour union activities on wage employment behaviour, conditions of service for its members and some government decisions for the betterment of the masses, through strikes and collective bargaining. However, labour activities also pose threats to macroeconomic stability in most of the free market economic, the problem of collective bargaining and the attendant strike actions it engenders have continued to pose disturbing questions in the minds of public relations experts, public administrators and the public in general. One of the most important questions is in respect of the usefulness of the strike in bringing about mutually acceptable and beneficial settlements to trade disputes .As the actions continue the public becomes more and more irritated and frustrated by the inconveniences and hardships these strikes cause …(Ekanem and Iyoha,1999). Gary Becker (1988),union…receive more credit and at the same time more blame than they deserve. Some opponents of union posited that curing inflation requires controlling those activities of union. Inflation is blamed on union on the ground that they artificially boost wages through collective bargaining or strikes. As can be observed/seen from the table below: before the minimum wage legislation was passed in year 2000, inflation rate fell from 10.0% in 1998 to 6.6% in 1999, but after the legislation was passed in 2000, at the end of the fiscal year, 2000, inflation rate now stood at 6.9%. while it rose from 11.0% in 2003 to 18.0% at the mid-year of 2004, as a result of general strike witnessed within this period (see table below). The effect of that of 2000 can be as follows: as income/wage increases, employees now found out that they have more money, thus, their demand increased, therefore leading to a higher price. Since this increase in wage wasn’t caused by increase in productivity. Also, during strike there is always reduction in supplies of goods and services to consumers, thus, causing the consumers to bear the costs as higher prices and lower consumption and federal government/firm incurs higher costs in carrying out its functions, thus, huge losses are incurred (by consumers, thus, higher price is charged), that’s millions of dollars are lost each day of the strike. However, as it has been argued for wage cost-push theory, the conditions for its application seems present in Nigeria. There has been growing unemployment and, thereby, stronger union. The effect of minimum wage legislation on the labour market cannot be overemphasis, before the legislation unemployment was 3.2% in 1999, but after the enactment it rose to 3.4% in that same 2000. However, there are social ills experienced during the period of strike in the nation, such as armed robbery, stealing, smoking of hard drugs etc. Mostly, students are people who indulged in these social ills, because whenever there is strike they are sent home, thus, they begin to engage themselves in one social ill or the other in order to keep soul and body busy. Consequently, jeopardizing the whole system. Further, many lives had being lost as a result of nurses and doctors being on strike. A clear example is the case of late Bola Ige who medical attention was not giving in university of Ibadan teaching Hospital as a result of strike and before they could have taken him to another Hospital he had already given up. This is what strike can cause the nation.
V) EFFORT MADE BY GOVERNMENT IN CURBING UNION ACTIVITIES: Government understanding the implication of the activities of labour has been making effort in curbing the activities of labour, in order to minimize its effect on socio-economic stability since the pre-colonial era. Ekekwe (1986) posited that government sought to control unionism through training in Britain, or locally through designated labour advisers, of union leaders…,while this was going on, government maintained a policy of being tough on the labour movement, as can been seen from the 1949 shooting of striking coal workers in Enugu. He still went on to say that government would also not recognize unions if it considered their leadership to be radical. Recently, to lessen the influence of labour, the federal government came on board with a proposed amendment to the labour bill. Though this wasn’t first of such. The bill is seeking to amend two existing Acts viz: i) The trade union international affiliation Act of 1996. ii) Trade union Act 1990 as amended. The objective of the proposed amendments is to align these Nigeria laws with democratic ethos and principles of a free society. In pursuing this objective it appears that there are undertone objectives of: i) Weakening the only CLO which has successfully challenged some government decisions. ii) De-registering NLC and iii) Outlaw strikes in Nigeria. All these are the symbols of destabilization of CLO that influences most of its decisions, but the bottom line is, how far can government go? However, union generally strives to accomplish some acceptable balance of increased income and improved conditions of service for their members. It does influence significantly the wage-employment decisions of the organization in which they operate. Whenever union succeed in achieving higher wage for its members, it is always at the expense of macroeconomic stability.
VI) CONCLUSION: Generally union seeks to attain some acceptable balance of increased wage-employment, improved conditions of services of its workers and curbing government hostile decisions. It does this through collective bargaining and strike or threat to strike. But whenever union embark on these activities, it is always at the expense of socio-economic stability of the nation. Thus, public frustration grows, more voices are being raised in favour of some compulsory settlement of labour-employer disputes. Freedom to strike comes at a price. But when the price is compared with the costs of compulsory settlement, it does not look nearly so high… (Ekanem and Iyoha, 1999). It is apparent that the influence and power of the Nigeria Trade unions for good or ill should not be underestimated…(Ekekwe, 1986),since their activities are capable of holding the economy (socio-economic stability) to ransom. Also the debate surrounding the impact of union wage increase on inflation will probably continue for as long as union exist. Therefore, this paper submits that labour and employer (government/ private sector ) should consider the masses in whatever decision they are to take since the repercussion of their actions will befall on the masses, by means of higher prices on goods and services, low consumption and loss of lives. Also, all kinds of social ills are experienced during the period of strike.
Byrns, R.T and G.W. Stone. 1992. Economics, U.S,A: Harper Collins Publishers Ekanem, O.T and M.A. Iyoha. 1999. Microeconomic Theory, Benin city: Mareh Publisher. Ekekwe, E. 1986. Class and State in Nigeria, Lagos: Longman Nigeria Limited, Pp64-65.
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Nkoro, E. 2004. Increase in fuel price: Analysis of its effect on Nigerian Economy
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