WAGE ADJUSTMENT PRACTICES AND WORKERS' REAL INCOME EXPERIENCES: EVIDENCE FROM MANUFACTURING FIRMS IN SOUTH-SOUTH NIGERIA
Abstract
Persistent inflation and the rising cost of living in Nigeria have significantly weakened workers’ purchasing power, particularly within the manufacturing sector where firms face escalating production costs and unstable macroeconomic conditions. This study examined wage adjustment practices and workers’ real income experiences in selected manufacturing firms in South–South Nigeria. Specifically, the study explored the adequacy of salary reviews, the extent to which inflation outpaced nominal wage increases, and the coping strategies adopted by workers in response to declining real income. The study adopted a qualitative documentary research design based on secondary data obtained from manufacturing firms’ annual reports, labour union publications, National Bureau of Statistics reports, wage policy documents, inflation reports, Central Bank of Nigeria publications, and related empirical studies published between 2020 and 2025. Data were analysed using qualitative thematic content analysis involving coding, categorization, and interpretation of recurring wage and welfare themes. The findings revealed that wage adjustment mechanisms within many manufacturing firms were irregular, weakly structured, and largely unresponsive to inflationary realities. The study further found that workers adopted coping strategies such as informal borrowing, consumption reduction, and income diversification to survive worsening economic conditions. Sectoral differences also emerged between multinational and indigenous firms in terms of wage flexibility and welfare support. The study concludes that nominal wage adjustments alone are insufficient to protect workers’ welfare in periods of persistent inflation without broader macroeconomic stability and institutionalized wage-indexation frameworks. The paper contributes to labour economics literature by providing contextual qualitative evidence on wage dynamics and real income erosion within Nigeria’s manufacturing sector during the current cost-of-living crisis.