Employment is not enough to get you out of poverty in Nigeria. Many Nigerians are working and poor. In some cases, the more they work, the poorer they get. 
To understand the scale of the situation, let's start by understanding poverty and how it is measured.
Poverty is <a href="https://www.stearsng.com/article/nigeria-is-in-multidimensional-poverty" rel="noopener" target="_blank">multidimensional</a>; but to put it simply, it is one's inability to meet their basic needs and wants. So, food, shelter, clothing, primary education and sanitation—are collectively referred to as welfare. When an individual cannot afford these needs, the person is considered poor. The lack of access to these needs and wants can be monetary or non-monetary. It's monetary when the person does not have the money to afford these things and non-monetary when non-financial barriers prevent you from accessing these needs, like geographical limitations, culture and more.
 
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<li class="p-RkUyC5hqXYbbFtq7en8FkF">Using consumption as a measure of poverty exposes that employment is not an</li>


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For the sake of this article, we'll focus on just the monetary aspect. 
Monetarily, poverty can be measured using either wealth, income or consumption. Wealth is a person's net worth, a combination of assets and income, which tells us what a person can afford over time. So, ideally, it should give us the best picture of their welfare and proximity to poverty. However, wealth is extremely <a href="https://www.brookings.edu/opinions/putting-a-tax-on-wealth-means-we-first-must-measure-it/" rel="noopener" target="_blank">tricky to measure</a>. You would need to assign values to someone’s assets at a given time—whether tangible like property or intangible like human capital—something that even the finest accountants and economists still struggle to do. 
This makes wealth a relatively difficult gauge of poverty compared to alternative measures.
Income and consumption, on the other hand, are easier to measure. Using income, we check how much a person needs to earn to live a minimum acceptable way of life, and whoever falls below that band is considered poor. In developed countries where income is easily measured and tracked (e.g. through payslips or tax returns) because most of the employment is in the formal sector, income is a good way to measure poverty. 
But in emerging countries where many people work in the informal sector, income is more difficult to measure, and consumption becomes a more appropriate measure of poverty. 
Consumption refers to how much a person spends on food and non-food items required for survival. So, it paints a better picture of people's access to their basic needs than income does. Consumption, although dependent on the taste of the individual, is more stable than income over a period of time. It gives us a picture of what a person can or cannot afford during a certain period. 
While income can fluctuate over a period, particularly for seasonal occupations like farming, consumption remains largely stable over time. This is because even when income changes, consumption can be supplemented by savings and borrowing. If a person loses their job and fails to earn an income for a certain period, using income as a metric shows us that the person might be poor. However, if the person has money saved up or has access to borrow some money for the period, then the person’s consumption can continue over a period. 
In Nigeria, the National Bureau of Statistics (NBS) and World Bank typically use the consumption measure to calculate Nigeria's poverty. First, they measure the basic food and non-food items required for survival; then they calculate how much it would cost to buy basic food and non-food items, which makes up the poverty line. In Nigeria's case, the <a href="https://us11.campaign-archive.com/?u=a4a603de91bcce179e8235a3e&amp;id=5647268ce2" rel="noopener" target="_blank">poverty line</a> is about ₦376 per day. Therefore, anyone who consumes food and non-food items worth less than ₦376 is considered poor. 
One downside to this measure is it doesn’t tell us if the mode of sustaining the consumption is good or bad. I had mentioned earlier that consumption can be sustained over a period through savings and investment. However, if a person’s consumption is only sustained by debt, then their consumption is unsustainable, and it’ll probably make them worse off in the future. 
Taking a deeper look at Nigeria’s consumption poverty reveals some interesting facts about the Nigerian poor. 
Let’s dig in.
 
<h4>You can't work your way out of poverty </h4>
Now that we understand how poverty is measured, let’s go back to our main point about how getting a job is not an antidote for poverty.
That might sound absurd because conventional wisdom states that employment increases our income, and a higher income means more consumption. So, employment should be a good way out of poverty. However, not all kinds of employment can raise people from poverty, and that's precisely one of the issues with poverty in Nigeria today. 
The recent World Bank Poverty Assessment report summarises the situation perfectly: poor Nigerians were more likely to be employed than wealthier Nigerians. 
When the report compared the unemployment rate for the wealthiest 60% of the population (by consumption), it was more than double the unemployment rate for the poorest 40%. Put another way, many Nigerians that had jobs were consuming or spending a lot less than their unemployed peers.
So, the poor were "working more" but remained in poverty. 
But this issue of employment not guaranteeing a path out of poverty is not peculiar to Nigeria alone; it's a global problem. The number of working poor in the <a href="https://www.economist.com/britain/2016/06/25/when-a-job-is-not-enough" rel="noopener" target="_blank">UK</a> increased by a quarter between 2006 and 2016. Likewise, many have jobs in the US but still fall under the <a href="https://www.nytimes.com/2018/09/11/magazine/americans-jobs-poverty-homeless.html" rel="noopener" target="_blank">working poor</a>—that is, they spent at least half of the year working in a job but remained in poverty. The Bureau of Labour Statistics in the US also records that in 2018, about <a href="https://www.bls.gov/opub/reports/working-poor/2018/home.htm" rel="noopener" target="_blank">5%</a> of the labour force. 
Going to a <a href="https://ilo.org/wcmsp5/groups/public/---dgreports/---stat/documents/publication/wcms_696387.pdf" rel="noopener" target="_blank">report</a> from the International Labour Organisation (ILO), there's a global working poverty rate of 9%. However, the working poverty rate is as high as 40% in low-income countries. Africa shows a grimmer picture, with employment among the poor being 55% while the non-poor is just about 45%. 
So, the world suffers from something called in-work poverty, but Nigeria’s case is quite severe. 
 
<h4>Getting a job that pays </h4>
Two broad things cause Nigeria's in-work poverty: the type of work the person is engaged in and the person involved.  
Let's start with the type of employment that the people who suffer from in-work poverty are engaged in. 
Going by the unemployment report in Nigeria, there are three categories of jobs available to a Nigerian: wage employment, farming employment and non-farm household employment. 
Wage employment refers to any non-farm role where an individual earns an income for their work. Farming employment refers to any employment on a farm, while non-farm household employment is where an individual works for a business owned by the household. 
Farming here primarily refers to small scale subsistence farms where people are employed informally. In many cases, people on the farm are not even rewarded monetarily. In the NBS’ latest LSMS household survey, it is recorded that about 34% of the total cultivated land in the country employed free labour (these are non-members of the household that are not compensated financially for their labour). In the North East, almost half of the cultivated plots hired free or exchange labour. 
Like working on a farm, working for a non-farm household enterprise involves working for the family, and in many cases, people who do this don't get paid well enough to help them escape poverty.
Therefore, wage work provides the most financially stable employment because workers here are certain—to a large extent—they’ll get paid for the work done throughout their employment. From the Covid-19 impact monitoring <a href="https://nigerianstat.gov.ng/download/1166" rel="noopener" target="_blank">report</a> for August 2020, we saw that although there was a general decline in income during the period, wage employment witnessed the lowest decline and was largely unchanged compared to farming and non-farm household businesses. 
Another significant advantage of having wage jobs is that they typically give people a clear path to long-term career growth and extra benefits like pension, social insurance, and paid leave. So, wage jobs give workers extra benefits that act as safety nets that help people preserve their salaries over a period. Most farming and non-farm enterprises are primarily informal and don't have the structure that wage jobs afford. 
Farming jobs are also seasonal. The way the employment surveys work is that the respondents are asked if they have been employed for the past four weeks before the survey; someone working on clearing a farm would probably say yes. However, the same person may be unemployed after the farm clearing period. This means that the individual is long-term underemployed. 
Therefore, people may fall under the working poor category because they’re underemployed—working in jobs that are not sustainable over the long term. The issue with such jobs is that they don’t give them enough financial leeway to sustain them while they search for better jobs when they’re out of the job. 
In Nigeria, the issue with in-work poverty is that fewer Nigerians are engaged in wage jobs that create stability and more income. Only <a href="https://www.worldbank.org/en/news/infographic/2022/03/21/afw-nigeria-poverty-assessment-2022-a-better-future-for-all-nigerians" rel="noopener" target="_blank">17%</a> of the entire labour force in Nigeria have wage jobs; the rest are either engaged in farming jobs (38%) or non-farm household companies (39%). 
These wage and non-wage jobs are also disproportionately distributed across the country. In the poorer states, there are fewer wage jobs and non-wage jobs, which means that many are also geographically restricted from seeking better jobs. In states where the share of agricultural employment is high, wage jobs are low, and vice-versa. Therefore, in states where wage jobs are higher, people tend to be richer than in states where only a few wage jobs exist. 
From what we've said so far, one of the solutions to the problem of in-work poverty is the migration from farming and non-farm household jobs to wage jobs. But even when wage jobs exist in poorer states, they usually lack structure and fail to give the employees their full benefits. Between 2018-2019, for every ten wage workers, only three had a pension, two had health insurance, and four got a paid holiday. 
The lack of structure sometimes means that people don't get the extra benefits others in urban areas enjoy when they are engaged in wage jobs. Smaller companies are also highly vulnerable and may not be able to stand economic crunches—the periods when the wages are needed the most. 
The employees are also unable to request better terms of engagement because of the outside options available to them. As we explained in this <a href="https://www.stearsng.com/premium/article/why-nigerian-tech-talent-gets-paid-less-than-foreign-talent" rel="noopener" target="_blank">article</a>, outside options are the bargaining power an individual has when the employment contract breaks—that is, when one party fails to hold their end of the bargain. Since very few people have wage employment in poorer states, many of the jobs are informal and the workers' have little or no bargaining power. 
Therefore, living in poorer states creates a sort of <a href="https://www.stearsng.com/premium/article/why-nigeria-remains-in-a-poverty-trap" rel="noopener" target="_blank">poverty trap</a>—an unending cycle of poverty that a person struggles to escape. They live in states where they have to choose between having a wage job with very loose contractual commitment and having a farming or non-farm household job that doesn’t guarantee stability. 
The crazy thing about the trap is that it is location-specific. Escaping poverty for them might sometimes call for drastic measures like migrating out of one's state. 
So, the first step to escaping in-work poverty is getting a well-paying job that affords a person significant benefits, even if it means leaving the state entirely. 
 
<h4>Many are called, few qualify</h4>
But not everyone can simply get a better-paying wage job, which takes us to our second reason for in-work poverty: the type of person involved. To get a wage job, a worker has to have the skills required to qualify for the role, but many job seekers lack the required skills for the well-paying jobs that exist. 
We've <a href="https://www.stearsng.com/premium/article/blind-spot-how-universities-create-unemployable-graduates" rel="noopener" target="_blank">written</a> extensively about this in the past; the rewarding wage jobs exist, but many people lack the requisite skills to take on those roles. 
The Nigerian education system <a href="https://www.stearsng.com/premium/article/going-to-university-is-good-but-quality-education-matters-more" rel="noopener" target="_blank">fails</a> to equip its graduates with the right skills to make them fit for today's workplace. So, many times students have to learn and relearn themselves; knowing the skills to learn and having access to the facilities required is one of the advantages of being in richer states. 
Another issue people with low paying jobs face is the time constraint to acquire these skills. They often get involved in jobs that pay them to live from hand to mouth, leaving little or nothing to save. Therefore, when they're not working, they're desperately searching for new roles to feed themselves and their families. On the other hand, people who had been previously engaged in rewarding roles are unemployed; sometimes, they have savings to fall back on, giving them enough time to search for well-paying jobs. A person who earns ₦100,000 is in a better place to save to search for a job when they become unemployed than someone who earned ₦30,000. 
This presents another poverty trap: the people in in-work poverty don't have the time between jobs to search for high paying roles or acquire skills that will prepare them for such positions, so they remain in poverty. 
 
<h4>Different ways to skin this cat</h4>
Based on what we've said so far, Nigeria's in-work poverty problem is caused by the poor distribution of well-paying jobs across the country, the volatility of farming and non-farm household jobs, low paying jobs, the poor structure of in-wage jobs in poorer states, and the lack of skills to acquire well-paying jobs. 
Therefore, there is no one-size-fits-all cure to these problems. This exposes the flaw in the government's job creation schemes which only employ people for a few months while paying them meagre sums. These government solutions do the exact thing that keeps people in working poverty. Granted, these jobs give people what they need to survive today, but it pays them a little over minimum wage and leaves them underemployed after a while—dragging them deeper into poverty.  
All the issues we have highlighted so far require peculiar solutions and solving them by simply providing 1,000 short-term jobs in every local government is not enough to solve the problem. There are more effective and sustainable ways of solving the problem, and we'll take on just a few in this article. 
First and most importantly is creating high-paying jobs. This is one way that even the people in wage jobs, that are not financially rewarding, can get out of poverty. And such jobs come from investment and expansion of the private sector. The digital ecosystem for one has been applauded for being able to hire a significant number of people. For instance, the 13 high growth startups that <a href="https://endeavornigeria.org/" rel="noopener" target="_blank">Endeavor</a> has worked with so far, have created over 24,000 direct and indirect jobs in Nigeria. Creating more high growth startups is key to creating more well-paying jobs. 
Then there is the issue of low paying farm and non-farm household jobs. One way of solving this problem is by fixing and enforcing a minimum wage and structuring employment such that the farming and non-farm wage jobs also include benefits. A minimum wage is often set so that, at the very least, people's incomes can cover their needs. However, in Nigeria, the minimum wage is hardly reviewed, and even when it is, it is not shielded from the woes of inflation. So, people are not earning enough to meet their needs in real terms.
The poverty rate in Nigeria today is ₦376 per day, and about ₦11,280 per month, which was calculated in 2018/2019. If we consider inflation from 2019, then the actual amount should at least be around ₦556 per day and ₦16,699 per month. Nigeria’s minimum wage is around ₦30,000, and whether that’s enough <a href="https://www.stearsng.com/premium/article/nigeria-needs-a-living-wage-not-a-minimum-wage" rel="noopener" target="_blank">living wage</a> in many Nigerian states is a topic for another day. However, not many employers pay up to ₦30,000. So the first step is enforcing the minimum wage. 
The extra benefits like pension and health insurance would be hard to implement, especially for smallholder farmers (who make up the majority of agriculture employers), so the government can provide this on behalf of the employers to improve the wellbeing of their staff. 
Also, people looking to migrate from low-paying jobs to more structured wage jobs need to be given some social welfare buffer to provide them with enough time to search for the right positions that will reward them adequately. 
Finally, training is essential. States should improve the quality of their labour by ensuring they have the right skills required by companies that can pay well and offer their non-monetary staff benefits. This does two things: attracts companies to the states where the labour they desire is and improves the diversity of jobs in poorer states.
The prevalence of persistent poverty in Nigeria is not necessarily because jobs don't exist but because people are engaged in the wrong jobs.

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