Breakdown of How Much Inflation Has Eaten Into Nigerian Workers Salaries in One Year
Nigerian workers are sinking into deeper poverty, no thanks to the rising inflation. It is even worst for an average Nigerian worker within the salary grade of N30,000 minimum wage and N200,000. Recently the National Bureau of Statistics (NBS) announced Nigeria’s headline inflation rose 20.52 per cent in August 2022 on a year-on-year basis. This is the highest level it has been since 2005.
For a Nigerian earning the National Minimum Wage at N30,000 per month, or N360,000 per year, when the annual salary is adjusted for inflation, the take-home pay in the last year has been reduced by N61,295 in real terms.
The Cost of inflation on Nigerian workers Economists calculate workers’ real income by dividing their wages by the annual inflation rate. It is calculated as [Wages / (1 + 20.62%) = Real Income]. Using the above formula, an average Nigerian worker’s annual salary of N360,000, when adjusted for inflation, is actually N298,705, or N24,892 monthly. How much is lost to inflation
According to job website analysis, the average starting salary of Nigerian graduates is at N100,000. For a graduate who celebrated securing a job a year ago at N100,000 monthly and N1.2 million annually, what that salary can now buy has dropped by a whopping N204.315 as of the end of August 2022. This is due to the fact that the N1.2 million annual salary is now worth N995,685 in real terms, or N82,973 monthly.