SME owners fear mass Job losses, slam jail threat over ₦70,000 Minimum Wage

A recent survey conducted by Small Business Insights reveals that Nigerian employers and SME owners reveals widespread concerns about the newly signed ₦70,000 minimum wage law, with many voicing fears that the policy could lead to job losses and warning that the threat of jail time for non-compliance is excessively harsh.

These findings come as businesses grapple with the economic realities of implementing the new wage structure amidst rising costs.


Key Findings from the Small Business Insights Survey:

1. Opposition to Jail Time Penalties
Over 90% of the surveyed employers and SME owners believe that the threat of jail time for failing to comply with the ₦70,000 minimum wage is overly severe. Respondents argue that while they understand the need for wage increases, such harsh penalties could cripple businesses, particularly smaller enterprises, that may face cash flow difficulties.


2. Widespread Job Loss Concerns
A striking 70% of respondents predict that the wage hike will lead to job cuts, with businesses forced to downsize in order to stay afloat. None of the respondents indicated that the new wage would create more jobs, with only about 15% expecting no significant impact. This highlights the growing concern that the wage law could unintentionally harm employment levels.


3. Affordability Challenges
Almost half of the respondents expressed that the ₦70,000 minimum wage is unsustainable for their businesses without government support. Employers indicated that they would welcome grants, subsidies, or tax relief to help absorb the increased labor costs, ensuring they can comply with the law without reducing their workforce.

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4. Delay in Enforcement Requested
65% of respondents suggested that the government delay the enforcement of the minimum wage law to give businesses more time to adjust. Many employers expressed the need for a grace period to plan their finances and adapt to the higher payroll costs, reducing the risk of layoffs.

5. Government Support is Critical
Although many business owners are open to complying with the new wage law, they emphasized that government intervention is essential. Without financial support or alternative measures, many SMEs fear that they will have no choice but to cut jobs or scale back operations.



Conclusion

The Small Business Insights survey highlights the concerns of Nigerian employers regarding the ₦70,000 minimum wage law. The overwhelming opposition to jail time penalties and the strong fears of job losses suggest that while the new law aims to improve workers’ livelihoods, it may have unintended consequences for businesses.

Employers are urging the government to reconsider the punitive measures and offer support to SMEs to prevent widespread job cuts. As the wage law is rolled out, finding a balance between improving worker pay and maintaining business sustainability will be crucial for the success of Nigeria’s economy.

This survey was conducted by Small Business Insights, a leading platform for SME and MSME news, providing data-driven insights that shape the Nigerian business landscape.