Nigeria's Minimum Wage
Navigating Nigeria's Minimum Wage: From
#30,000 to a Living Standard
#how to calculate the would be salary after the
implementation of the minimum wage#
What is Minimum Wage?
Cambridge Dictionary defines it as the lowest pay for an
hour's work that can legally be paid to a worker but in Nigeria instead of
hourly pay it is the lowest pay for a month work that can legally be paid to a
worker. Collins Dictionary emphasizes Minimum wage is the lowest wage an
employer is allowed to pay, as per law or agreement.
The
minimum wage is the lowest amount an employer can legally pay an employee for
their labor. It serves a crucial purpose, ensuring a baseline standard of
living for workers and preventing exploitation. In Nigeria, the minimum wage
has been a topic of constant debate and revision, reflecting the country's
evolving economic landscape.
For
many Nigerians, the concept of a minimum wage holds immense significance. It
represents a safety net, a guarantee of basic income to meet essential needs
and participate in the economy. But what exactly is the minimum wage, and how
does it function in the Nigerian context?
Nigeria's Minimum Wage Journey
Prior
to 2019, Nigeria's minimum wage had stagnated for several years, failing to
keep pace with inflation. This resulted in a situation where many workers,
particularly in low-wage sectors, struggled to make ends meet. In 2019, a
significant change occurred. The government, acknowledging the growing
hardship, signed a new national minimum wage of N30,000 (around $83 USD at the
time). This increase, popularly known as #30,000, was a welcome relief for many
Nigerians.
The
#30,000 minimum wage undoubtedly had a positive impact. It boosted the
purchasing power of low-wage earners, stimulating the economy through increased
consumer spending. However, challenges remained. The cost of living continued
to rise, and N30,000 soon became insufficient to cover basic necessities in
many parts of the country.
Living on #30,000 in Nigeria
Imagine
trying to manage rent, food, transportation, and utilities on N30,000 per
month. While the exact purchasing power varies depending on location, for many
Nigerians, this minimum wage presented a constant struggle. Housing costs alone
could devour a significant portion of income, leaving little for other
essentials.
Many
minimum wage earners employed creative strategies to survive. Sharing
accommodation, opting for cheaper transportation alternatives like bicycles,
and relying on local markets for groceries were common practices. However, this
constant juggling act took a toll, leaving workers vulnerable and with limited
opportunities to save or improve their quality of life.
HOW TO CALCULATE THE #30,000 MINIMUM WAGE
Here we are going to be discussing how you can calculate your
expected salary given the Nigeria #30,000 minimum wage.
Calculating The minimum wage in Nigeria is determined based on
monthly income, considering an average working period of 8 hours daily and 5
days weekly
Calculating the minimum wage involves different percentages for
various grade levels. Even though the Minimum wage is to be #30,000 it does not
mean that their will be an additional #30,000 in workers salaries. It is
calculated based on the percentage of your salry befor the minimum wage and
also varies in accordance to your grade level.
GL7: ( 23.2% OF YOUR INITIAL SALARY BEFORE MINIMUM WAGE)+(YOUR INITIAL
SALARY BEFORE MINIMUM WAGE)
For instance if you
were earning #32,000 as your salary before the minimum wage as a LEVEL 7 staff.
Then your salary after minimum wage would be
(23.2/100 = 0.232 )
0.232 x 32000 = #7000
Going back to this
formula ( 23.2% OF YOUR INITIAL SALARY BEFORE MINIMUM WAGE)+(YOUR INITIAL
SALARY BEFORE MINIMUM WAGE)
It will now be
(7000)+(32000) = 39,0000
This is just an example
apply this to your salary lets see.
GL8: 20% OF YOUR INITIAL SALARY BEFORE MINIMUM WAGE)+(YOUR INITIAL SALARY
BEFORE MINIMUM WAGE)
GL9: 19% OF YOUR INITIAL SALARY BEFORE MINIMUM WAGE) + (YOUR INITIAL
SALARY BEFORE MINIMUM WAGE)
GL10-14: 26% OF YOUR INITIAL SALARY
BEFORE MINIMUM WAGE)+(YOUR INITIAL SALARY BEFORE MINIMUM WAGE)
GL 15-17: 14% OF YOUR INITIAL SALARY
BEFORE MINIMUM WAGE)+(YOUR INITIAL SALARY BEFORE MINIMUM WAGE)
In summary the 30,000 minimum wage promises:
GL 7: 23.2%; increase
GL 8:20%; increase
GL 9:19%; increase
GL 10-14:26%; increase
GL 15-17:14%; . increase
(use the example we used in grade level 7 to
work out your salary)
The 2023 Increase: A Shift from N30,000
to N65,000
Recognizing
the limitations of the #30,000 minimum wage, the Nigerian government took a
significant step in 2023. A new policy introduced a combined minimum wage of
N65,000 (around $143 USD at the time). This increase comprised two parts: a
base minimum wage of N30,000 and a temporary wage subsidy of N35,000 for the
first six months.
The
N65,000 minimum wage offered a lifeline to many Nigerians. It provided some
breathing room for essential expenses and potentially allowed for a slight
improvement in living standards. However, questions remained about the
sustainability of the wage subsidy.
The Road Ahead: Challenges and Considerations
The journey towards a sufficient minimum wage in Nigeria is ongoing. Inflation remains a concern. Even with the increase, the N65,000 minimum wage could potentially lose its purchasing power over
References
wageindicator.org - Minimum wage - Nigeria
nairaland.com - How is minimum
wage calculated?
facebook.com - Nasarawa
Reporters - KNOW YOUR NEW SALARY
wageindicator.org - Fair Work
Pay Rates and Minimum Working Wage in Nigeria
mywage.ng - Minimum wage -
Nigeria
stears.co - Calculating
Nigeria's new minimum wage—a complex dance