Breakdown of How Much Inflation Has Eaten Into Nigerian Workers Salaries in One Year

These are not good times to be an employee, particularly a Nigerian worker, regardless of pay grade Rising inflation has eaten substantially into workers’ take-home income in value terms in one year

This report breakdown the amount of money cut off from workers Nigerian workers’ salaries due to inflation

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.

inflation rate in one year Credit:NBS Source: Facebook

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.

Other salary grades and losses

Using the above formulae, here is the workers’ actual salary according to to pay grade.

Implication

The new number now means a bag of Rice is now more than the minimum wage of workers’ salary.

A recent market survey carried out by Legit.ng showed that a bag of Rice sells from N36,000 upwards and the small grain from N32,000 upwards.

It will take an average Nigerian worker over 3 years to buy the new iPhone 14pro

Meanwhile, in another report, Legit.ng showed that the newly released iPhone 14pro will need huge sacrifices for an average Nigerian worker to buy.

The report showed how it will take a full savings of over three years for anyone within a pay grade of N30,000 to buy.

iPhone is seen as a status symbol among Nigerians, which explains why, despite its expensive price, it is in high demand

Source: Legit.ng