Nigerian minimum wage earners will need to be handed at least N104,400 monthly to retain the material satisfaction N30,000 take home afforded them when the current minimum wage was adopted in April 2019, an independent data analysis conducted by The Guardian has suggested.
That means entry-level workers need an additional N74,400 to retain their welfare losses and the prestige of workers. The analysis is strictly backward-looking and ignores the near-future path of price changes.
Adjusted for headline inflation, food inflation, fuel price increase and foreign exchange movement, the current wage level has lost its value and would need to be tripled to restore the purchasing power of the working class. An average worker, whether they are on public or private sector payrolls, the analysis suggests, will need an almost 200 per cent pay raise to maintain the 2019 utility level, otherwise, they will slip further below the poverty index.
But since essential items, which the low-income earners consume, rise faster than other goods in a high inflationary economy like Nigeria, minimum wage earners will need much more than a 200 per cent upward salary review to prevent them from falling to a lower poverty level than they were five years ago.
Detailed research of the country’s price movement in the past five years, and even beyond, shows that rice, bread, yam, beans and garri, which are often considered food items for ordinary Nigerians, have increased faster than other items on the consumer price index (CPI) in the past five years, and even beyond.
For instance, while the general price level has increased by only 160 per cent since April 2019, according to data obtained from the National Bureau of Statistics (NBS) database, offline research shows that yam, rice and bread have increased by an average of 630 per cent in the same period.
For Nigerian workers who spend all their incomes on the three items (this is a mere hypothetical as nobody consumes the three items in the real world), a N30,000 take home in 2019 will need a geometric increase to over N180,000. Otherwise, the real incomes of the category of consumers will fall below the pre-COVID-19 era.
Beyond the complexity of essential consumption bundle analysis, key consumer or standard of living measurement variables show that N30,000 today has lost nearly 70 per cent of its value when compared with what it was five years ago.
