N500,000 minimum wage is not outrageous

Sometime in 2019, I started asking people willing to volunteer how much they earned, or at least the range of their household income. When they gave me the figures, it was eye-opening. Most families were surviving—not living—on a pittance, and it was clear that their life choices were severely limited by such low incomes. Even more, it made sense why there seems to be so much corruption, lack of integrity and dignity, and a heightened sense of desperation among our folks. That was also when I understood implicitly what Nigerians were really talking about when you ask them how they cope, and they respond, “It is just God.” When the arithmetic of daily living is illogical, people will attribute their survival to otherworldly sources. At that time, I concluded that for Nigerians to live a modicum of the good life, each family must earn at least N500,000 monthly. Whenever I tell people that, they laugh in my face. Please know that was in 2019, when that sum was around $1,400, and N500,000 seemed far-fetched then. In 2026, in de-subsidised Tinubu’s economy, where N500,000 now roughly equals $375, that sum is already behind.

In the past few months, workers in Nigeria have been demanding a salary review to match current realities, and the agitations will ramp up in the coming months. They will use the opportunity of the timing to force a government facing a major election to negotiate. They are setting the new minimum wage at N500,000, which is merely a good start.

That amount will offer some momentary relief from an economic situation that has become punishing. Nigerians have gone through many hard times, from the days of Muhammadu Buhari’s many wrongheaded policies to Tinubu’s neoliberalism, and it is high time their purchasing power is increased. With the de-subsidization of fuel, Nigerians have been made to face the harshest effects of rising global energy prices without the concomitant benefits. When oil prices rise worldwide, Nigerians feel the effect more than they ever experience a reprieve when they fall. That is not how it should work, but the Nigerian mathematics always manages to defy the laws of nature. The price of oil per liter currently stands at N1,430, with the attendant multiplier effect on other costs of living such as food, housing, energy and utilities, education and healthcare, and even leisure. How are people supposed to survive the onslaught? They will be pushed deeper into poverty.

In Nigeria, we never really get to have a sophisticated national conversation about poverty without getting mired in the defensiveness of the partisan hacks who cannot reason farther than the next election. Their immediate thinking is that any reference to the reality of Nigeria’s unmitigated poverty is a criticism of their political affiliation, so they preempt issues with their unthought-out arguments. Take, for instance, the ambassador-in-perpetual-waiting Reno Omokri, who recently argued that an average Nigerian can survive on a mere N3,000 daily. Or the special adviser to the President, who likes to argue that “a modest family will feed for several days with N10,000”. You wonder why these clowns can’t think about the quality of a Nigerian life beyond the ability to consume beyond the most basic element of survival: food.

The closest we have come to officially nailing down what it means to be materially poor in Nigeria is the figures estimated for other purposes. For instance, when the eligibility guidelines for accessing student loans were first released in 2023, they stipulated that the student or their family must not earn more than N500,000 per annum. While that at least gave us a grasp of how official sources understand poverty, the insight is still limited. Whether you make N500,000 (roughly N42,000 monthly) or three times that, your choices are still limited.

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The difference between making N500,000 and N1500,000 is just the option to eat a little more, not necessarily the increased ability to make defining decisions.

Last year, we got a more reasonable poverty figure when then-Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, indicated <N250,000 monthly household income as the poverty level. While we bear in mind that his calculations were for tax purposes, they still offered a more realistic grasp of the poverty level Nigeria currently grapples with. According to Oyedele, <N250000 better reflects the Nigerian poverty situation than data from organisations like the World Bank and the UN, which peg poverty levels to survival on less than $2.15 daily. With <N250,000 ($188) for a family of five (as they calculated it), what is available for each person in the household comes to roughly $37.5 monthly and $1.25 per person per day. So, when you divide the N250000 per five-person household per month by 30 days, the result still does not depart from the same poverty figures provided by the World Bank and the UN being disputed.

By now, it should be obvious to our leaders that their successive administrations spend far more time arguing over what constitutes poverty in this part of the world than redressing it. The first step toward demonstrating some seriousness in addressing poverty should be to raise the minimum wage to N500,000 for government workers. The money will not make anyone rich and will likely land on the scorched ground of high living costs, but it will at least give them some reprieve. People currently spend about 80-100 percent of their income on basic items such as food, transportation, and day-to-day expenses. This means that for non-daily expenses such as housing, healthcare, education, and personal care, they are forever scrambling to make ends meet. Meanwhile, there is also an ongoing discussion about removing electricity subsidies. While that might not happen this year, we had best believe that if Tinubu wins next year, he will. He will justify imposing one more burden on people by claiming that some spirits whispered it into his ears to institute the policy.

Second, higher salaries will redistribute some of the lush monies state governors are now receiving to people at the grassroots level. Governors get so much more federal allocation these days, but what significant difference has that made in the lives of Nigerians beyond paying salaries and pensions more regularly? Instead of investing in projects that actually benefit people, some governors waste resources on white-elephant projects like new airports and what even Tinubu himself called “unnecessary flyovers.” That is what happens when people have money but lack vision; they act like savages, with no thought for tomorrow. There should be more to Nigeria’s post-subsidy economy than the bare minimum, and a higher salary for workers is a step toward putting more money into the economy so it can percolate through the system.

Third, a N500,000 minimum wage will—at least for now—put some Nigerians above the poverty threshold. That sum per household will translate to roughly $2.50 per person per day, which may not be much of a far cry from the $2.15 poverty level, but will make a significant difference in the material conditions of the people who receive it. I am, of course, mindful that private organizations and state governments may not be able to match that sum, but the federal government can afford it, and they should take the first step. Let the states and private organisations follow by negotiating their workers’ salaries/wages accordingly. I also expect that some people will make the usual argument that higher wages will cause inflation (we all learned that in secondary school). Yes, but we are already in a situation where people are reeling from high inflation even with low wages. Stagnant incomes won’t make anything better; they will just suffer.