Small Business Owners Push Back Against Proposed Minimum Wage Hike

Small Business Owners have pushed back against the proposed Minimum Wage hike.

 

NewsOnliine Nigeria reports that the Organised Private Sector (OPS) and entrepreneurs across the country have kicked over the proposed National Minimum Wages between the federal government and the labour.

 

Their grumble was as a result of the impact the national minimum wage will have on their businesses when it finally becomes law.

A proposed wages of N62,000 is currently before the president for ascent, even as labour is still pushing for at least N100,000 which OPS said they don’t have the financial muscle to pay.

 

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Hence, the Organised Private Sector (OPS) has expressed concern over the continuous agitation over New National Minimum Wage, adding that, pushing beyond N62 000 may force members of the sector to downsize.

 

This is even as the Federation of Informal Workers of Nigeria (FIWON) has expressed its readiness to adopt whatever may be the outcome of the negotiations between Labour and federal government.

 

In a chat with LEADERSHIP, the director general of NECA, Adeyemi-Smatt Oyerinde, sounded the note of warning against overstretching the employers of Labour in OPS that has already be pushed to the wall by current economic crunch.

According to Oyerinde, the current economic situation has made the negotiations much more difficult for every one.

He noted that, ‘it should be emphasised that what the Committee was mandated to discuss was a new national minimum wage, not a general salary increase.’

Lamenting that many businesses, following their inability to weather the storm, have already left the country, this negotiations, he added, could be another condition that would affect them.

 

To him, “In the present circumstances and even before the inauguration of the Tripartite Committee, many businesses have either folded, relocated or reduced their operational capacity, with consequential effect in job security. Thus, the private sector factored in those indices before it agreed to bend backward and made the N62,000 offer. Any figure beyond this will definitely have a consequential effect on job security.

 

“As far as we are concerned, the Tripartite Committee has completed its assignment by submitting the report to the Federal government. We are waiting on the President and Commander-in-Chief to do the needful.”

 

Efforts to get response from Manufacturers Association of Nigeria (MAN) did not yield positive results as the DG refused to respond both the message and calls.

 

Meanwhile, Professor of Water Resources, Environmental Engineering and Civil Engineering of Redeemers University, Ede, Prof. Ife Adewunmi has weighed in on the minimum wage debate, and has a divergent view to the Labour Union’s demand.

The don, who was a scholar of Obafemi Awolowo University, stated that, he opposed the salary increase for now as this would cause a domino effect.

 

“Even though I am a Trade Unionist (I was OAU ASUU Chairman 2008-11) and stood against exploitation of all staff when the University was illegally deducting 7.5% again as Pensions deduction after it has been removed from source into PenCom Account. We eventually got part of it back after a non-violent struggle that lasted about 3 years!”

 

Prof Adewunmi added that , “Why I oppose salary increase is the Domino effect of hyperflation that will follow such increase because the new increase will not go into production but consumption. What Labour and Nigerians should insist to be done is the creation of enabling environment for incrrased productivity.

 

“It is wicked of the government to increase tarrif on electricity Bill. Power supply that is insufficient and epilectic should even have a reduction in charges! Instead of overcentralization, each State or Region should generate the power to the Grids of private Power Companies just as there are different Network providers.

 

The scholar, while speaking further, noted that, “the total formal sector working population is less than 14% of the country. The Iyalojas, Commuter operators, the artisans, farmers and even the Bukateria operators are waiting to hear the “good news of increased government workers’ salary to calculate their own increase in their own goods or services!

 

“Remember, we are yet to adjust to increse in fuel pump prices from N165 to N680-900 depending on the fuel station! You also know the proportionate increse in other things in kuding cooking gas. People are now back to thr firewood and charcoal stoves era of the 1960s!”

 

Adewunmi stated that, the labour union, rather than ask for salary increase of minimum wage, should demand for social reliefs such as regular provision of social amenities like adequate subsidised commuter bus services by local and state governments, adequate public water supply, electricity supply, adequate security to protect farmers engaged in food production.

 

He noted that, president Tinubu promised to hit the ground running to stop insecurity from cattle herding terrorists and kidnappers, and queried if Tinubu has really curbed insecurity?

“We need social security increase in terms of food, water, energy supply, good roads, freedom to do one’s job without fear of gun-totting fulani terrorists camouflaging as herders. These wage war of hunger on the country so that it will be their own that we will be forced to depend on. Prof Adewunmi added that what Nigerian workers need is a living wage not a minimum wage,” he stated.

 

Earlier, the president, Premium Breadmakers Association of Nigeria (PBAN), Emmanuel Onuorah said: “Inflation today is 33.95 per cent. What does it tell you? For every N10,000 or N1 you earn, about 40 per cent of it has been eroded by inflation, and food inflation is going towards 41 per cent, meaning that 41 per cent of that salary would be used for food.

 

“For me, I don’t think labour demand is outlandish. It is for everybody to work with their workers in their various industries. For the time being, in the private sector, open the books to your workers. Let him see the books; look, this is where we are as a business; they will appreciate you more for that. You understand that, as a business, I try as much as possible, and I encourage my members to pay a living wage and don’t owe them. So that is it for us.”

 

Similarly, the founder/CEO, Tudu Energy, Tuoyo Dudu, stated that, he is not a fan of a minimum wage. “For me, I am more of a fan of the living wage. The term minimum wage—I find it derogatory, and I guess it is what we used. So, the Labour Union asking for better wages makes lots of sense considering the cost of things right now. As of the last time, the union is asking for N250,000. But I don’t think the N250,000 is realistic based on the economy and on what the government can even pay.

 

“For me, I think the current minimum wage should be at least N100,000, just based on the cost “of things in the market. Also, the major thing about the law is that, when it is made, whether it is comfortable or not, people have to adhere to it, and eventually, things will adjust.”

 

If the wage increases beyond what employers of labour can pay, he said, it might lead to jobs being lost, adding that, “But what would also happen is that it would push people to be more productive. So I suggest the government should do two things. Pay a living wage and, at the same time, create an avenue for businesses to thrive in the country, which is power. Nigeria needs power. If we have power, then businesses can sort themselves out. “

 

An SME owner, Folusho Folajimi, stated that, “No doubt that the current minimum wage amounts to next to nothing right now as Nigeria’s economy is suffering daily. However, the demands of the labour union if it becomes binding as a national minimum wage cannot be sustainable for SME owners like myself.

Companies, he noted, are exiting the country, importation charges of material keep soaring and there exists next to nothing when evaluating the purchasing power of the average Nigerian.

 

Another small-scale business owner, Nnadozie Peters, disclosed that, it depends on the financial capacity of such private businesses though she doesn’t think the agitated national minimum wages can be sustained across the board.

 

She, however, remarked, “Private business owners may pass on the increased labour costs to consumers through higher prices for goods and services. This could potentially affect consumer purchasing power and overall demand in the economy.”