Would a Higher Taxable Minimum Wage Hurt or Help Small Businesses in Nigeria?

I want to examine how a higher taxable minimum wage could affect a small Nigerian water factory with 10 workers. In this example, the driver earns ₦100,000, the supervisor earns ₦120,000, and eight factory workers earn a combined ₦480,000. I also include ₦600,000 for the owner, monthly electricity costs of ₦300,000, and other expenses of ₦200,000. This puts total monthly costs at about ₦1.8 million. If the business sells 200 bags of water daily at ₦700 per bag, monthly revenue could be ₦4.2 million. Even at 100 bags daily, revenue would be about ₦2.1 million. My argument is that a minimum-wage increase may lead to a short-term price increase, but wages are not always the largest cost for small businesses. Higher worker incomes can also raise demand. If energy and fuel costs later fall, competition could push water prices down again. Employers generally pay market rates even when sales are uncertain, because workers must still be paid. That is why I believe government should regularly review the minimum wage, including how it is taxed, while also reducing energy and fuel costs for businesses.

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