2026-02-25 · NextMigrate Team
Why Your Salary Hasn't Kept Up With Inflation (And Where in the World It Has)
You got the raise. Maybe 10%, maybe even 15%. Your manager said it was one of the highest in the department. You felt good about it for about a week — until you went grocery shopping, filled your car with fuel, or checked the exchange rate. The numbers did not add up. You earned more naira, more rupees, more pesos than last year, but somehow you could afford less.
This is not a feeling. It is a measurable, documented, and accelerating economic reality in dozens of countries. And for millions of skilled professionals in Nigeria, India, the Philippines, Egypt, and Pakistan, it is the single biggest reason their careers feel like they are going backwards.
The question is not whether your salary has gone up. It almost certainly has, in nominal terms. The question is whether your purchasing power — what your salary actually buys — has gone up. And for most professionals in developing economies, the answer over the past decade has been no.
How Real Wages Work (And Why Nominal Raises Are Misleading)
Real wage growth is your salary increase minus inflation. If you got a 12% raise but inflation was 18%, your real wage growth was negative 6%. You got poorer despite earning more money.
This distinction matters enormously because employers in high-inflation countries often give what seem like generous raises — 10%, 15%, even 20% — while inflation quietly eats through the entire increase and then some. The headline number looks decent. The lived experience is one of slow, persistent decline.
In stable developed economies, this dynamic operates differently. Inflation is lower, wages tend to keep pace with or slightly exceed it, and importantly, savings retain their value because the currency itself is not depreciating against the global basket.
Real Wage Growth: Developing vs Developed Countries (2020-2025)
Here is what five years of real wage growth actually looked like across different countries. These figures account for both salary increases and inflation, giving you the net change in purchasing power.
| Country | Avg. Nominal Wage Growth (Annual) | Avg. Inflation Rate (Annual) | Real Wage Growth (Annual) | Cumulative Real Change (5 Years) |
|---|---|---|---|---|
| Nigeria | 12-18% | 22-34% | -10% to -16% | -40% to -55% |
| Pakistan | 8-12% | 20-29% | -12% to -17% | -45% to -58% |
| Egypt | 10-15% | 24-38% | -14% to -23% | -50% to -65% |
| India | 8-10% | 5-7% | +1% to +3% | +5% to +15% |
| Philippines | 5-8% | 5-6% | 0% to +2% | 0% to +10% |
| Canada | 4-5% | 3-4% | +1% to +2% | +5% to +10% |
| Australia | 3-5% | 3-5% | 0% to +1% | 0% to +5% |
| Germany | 3-6% | 3-6% | 0% to +1% | 0% to +5% |
| UAE | 3-5% | 2-3% | +1% to +2% | +5% to +10% |
| UK | 4-6% | 4-6% | 0% to +1% | 0% to +5% |
| New Zealand | 4-5% | 3-5% | +1% to +2% | +5% to +10% |
The numbers for India and the Philippines look more moderate, but the starting base matters. A 2% real gain on a salary of $12,000 per year is $240. A 1% real gain on a salary of $75,000 per year is $750 — more than three times as much in absolute terms.
For Nigeria, Pakistan, and Egypt, the picture is stark. Professionals in these countries have lost between 40% and 65% of their purchasing power over five years. That is not a statistic. That is a decade of savings erased.
What This Looks Like in a Career: The Software Engineer
Let us trace a specific career. Chinedu is a software engineer in Lagos. He started in 2020 earning 4.5 million naira per year — at the time, roughly $11,700 at the prevailing rate of about 385 NGN/USD.
By 2025, after consistent promotions and strong performance reviews, he earns 12 million naira per year. In nominal terms, his salary has grown 167%. His company tells him he is one of the highest-paid engineers in the organisation.
But the naira moved from 385/USD to approximately 1,550/USD over the same period. His 12 million naira now converts to roughly $7,740. His salary nearly tripled in naira and fell by a third in dollar terms.
Now consider Priya, a software engineer of similar skill in Toronto. She started in 2020 earning CAD 85,000 (about $64,000 USD). By 2025, after similar career progression, she earns CAD 120,000 (about $87,000 USD). Her real wage growth was modest — perhaps 2% per year after inflation. But her purchasing power is stable, her savings retained their value, and her compensation in global terms increased by roughly 36%.
| Metric | Chinedu (Lagos) | Priya (Toronto) |
|---|---|---|
| Starting salary (2020) | 4.5M NGN (~$11,700) | CAD 85,000 (~$64,000) |
| Current salary (2025) | 12M NGN (~$7,740) | CAD 120,000 (~$87,000) |
| Nominal growth | +167% | +41% |
| Real purchasing power change | -34% (in USD terms) | +36% (in USD terms) |
| Savings value after 5 years | Significantly eroded | Largely preserved |
Chinedu is not less talented. He is not less hardworking. He may well be more skilled — he has had to solve harder problems with fewer resources. But the economic system he operates in has transferred his productivity gains to inflation, currency depreciation, and structural inefficiency.
The Compounding Problem: Why This Gets Worse Over Time
The truly devastating aspect of negative real wage growth is that it compounds. When your savings lose value, you have less capital to invest. When you have less capital, you cannot take career risks — like switching jobs, starting a business, or pursuing further education — that might break you out of the cycle.
In economies with positive real wage growth, the opposite happens. Savings compound. Career investments pay off. Risk-taking is rewarded because the baseline keeps rising.
Here is what this looks like over a 10-year career for a mid-level professional:
Cumulative Wealth Gap: 10-Year Career (Mid-Level Professional)
| Year | Nigeria (NGN, ~USD equiv.) | Canada (CAD, ~USD equiv.) | Gap |
|---|---|---|---|
| Year 1 | 5M NGN (~$12,500) | CAD 80,000 (~$60,000) | $47,500 |
| Year 3 | 7M NGN (~$9,000) | CAD 90,000 (~$67,500) | $58,500 |
| Year 5 | 10M NGN (~$7,500) | CAD 100,000 (~$75,000) | $67,500 |
| Year 7 | 14M NGN (~$7,000) | CAD 115,000 (~$86,000) | $79,000 |
| Year 10 | 20M NGN (~$6,500) | CAD 135,000 (~$101,000) | $94,500 |
The gap does not shrink. It accelerates. By year 10, the Canadian professional has accumulated roughly $94,500 more in annual earning power — and that does not account for savings, investments, pension contributions, or the appreciation of assets purchased with a stable currency.
Sector-by-Sector: Where the Gap Is Widest
The purchasing power erosion is not uniform across professions. Some sectors feel it more acutely because global benchmarks are more visible.
| Profession | Typical Salary (Nigeria, USD equiv.) | Typical Salary (Canada) | Typical Salary (Australia) | Typical Salary (Germany) |
|---|---|---|---|---|
| Software Engineer (Mid) | $6,000-$10,000 | $75,000-$110,000 | $80,000-$120,000 | $55,000-$80,000 |
| Accountant (5+ yrs) | $4,000-$7,000 | $65,000-$85,000 | $70,000-$95,000 | $50,000-$70,000 |
| Registered Nurse | $2,500-$5,000 | $65,000-$90,000 | $70,000-$95,000 | $45,000-$60,000 |
| Civil Engineer | $4,000-$8,000 | $70,000-$100,000 | $80,000-$110,000 | $50,000-$75,000 |
| Marketing Manager | $3,500-$7,000 | $70,000-$100,000 | $75,000-$105,000 | $50,000-$75,000 |
| Doctor (GP) | $6,000-$15,000 | $180,000-$300,000 | $200,000-$350,000 | $80,000-$130,000 |
The pattern repeats if you substitute Pakistan, Egypt, or the Philippines for Nigeria. The absolute numbers shift, but the ratio — ranging from 6x to 30x depending on the role — remains in the same ballpark.
Why Raises Cannot Fix a Currency Problem
Companies in Nigeria, Pakistan, and Egypt face an impossible constraint. They earn revenue primarily in local currency (or if they earn in dollars, they face conversion and repatriation challenges). They cannot pay dollar-equivalent salaries because their cost structure does not support it.
So they give raises that look generous in percentage terms. 15% in Nigeria. 12% in Pakistan. 20% in Egypt. And these are genuine, well-intentioned raises. The problem is that inflation — driven by currency depreciation, fuel costs, import dependency, and monetary policy — outpaces anything a private employer can sustainably offer.
The International Labour Organization's 2025 Global Wage Report documented this. Real wages in Sub-Saharan Africa declined by an average of 3.8% in 2024, with Nigeria experiencing the sharpest decline in the region. South Asia saw real wage stagnation outside of India's top-tier tech sector. Meanwhile, real wages in advanced G7 economies grew by 1.2% on average, after two years of post-pandemic inflation compression.
The Psychological Cost of Earning More and Having Less
There is a psychological dimension that rarely gets discussed. When you earn more but can afford less, the cognitive dissonance is exhausting. You know you are progressing in your career. Your title changed. Your responsibilities grew. Your skills improved. But the material reality of your life does not reflect any of that progress.
This creates a specific kind of career frustration that is different from simply being underpaid. Being underpaid means you need to negotiate better or switch jobs. Having your purchasing power eroded by macro forces means that no amount of individual optimisation — better performance reviews, job-hopping for raises, side hustles — can offset the structural decline.
A 2024 survey by Jobberman found that 67% of Nigerian professionals who received above-average raises in the previous 12 months still reported feeling "worse off financially" than the year before. A similar survey by Naukri in India found that the figure was 31% — lower, but concentrated among mid-career professionals in Tier 2 and Tier 3 cities where local inflation runs higher than national averages.
Where Real Wages Actually Grow
The countries where professionals consistently see real wage growth share several characteristics:
Low and predictable inflation. Central banks in Canada, Australia, Germany, and New Zealand target 2-3% inflation and generally hit it, with occasional deviations that self-correct. This means a 4-5% raise translates to 1-3% real growth almost every year.
Stable currencies. The Canadian dollar, Australian dollar, euro, and New Zealand dollar fluctuate against the USD, but within a narrow band. A 5-10% swing over a year is considered significant. Compare that to the naira's 300%+ depreciation over five years.
Strong labour market institutions. Minimum wage laws, collective bargaining, and labour market tightness in sectors like healthcare, construction, and technology create upward pressure on wages that at least keeps pace with costs.
Asset appreciation. In countries with stable currencies and functional property markets, homeownership and investment returns add a second layer of wealth accumulation on top of wage growth. A professional in Sydney who bought a house in 2020 has seen both their salary and their home equity grow in real terms. A professional in Lagos who saved in naira has watched both erode.
Real Wage Growth Track Record (2015-2025)
| Country | Cumulative Real Wage Growth (10 Years) | Currency Stability (vs USD) | Inflation Avg. |
|---|---|---|---|
| Canada | +12% to +18% | Stable (±10%) | 2.8% |
| Australia | +8% to +14% | Stable (±12%) | 3.1% |
| Germany | +10% to +16% | Stable (Euro ±8%) | 2.9% |
| New Zealand | +10% to +15% | Stable (±12%) | 3.0% |
| UAE | +8% to +12% | Pegged to USD | 2.2% |
| UK | +5% to +10% | Moderate (±15%) | 3.5% |
| India | +5% to +12% | Moderate depreciation | 5.5% |
| Philippines | -2% to +5% | Moderate depreciation | 4.8% |
| Nigeria | -40% to -55% | Severe depreciation | 18-34% |
| Pakistan | -35% to -50% | Severe depreciation | 15-29% |
| Egypt | -45% to -60% | Severe depreciation | 20-38% |
The Remittance Math That Nobody Talks About
Here is an angle that is rarely discussed openly but is on the minds of millions of professionals in developing countries: the family economics of working abroad.
A software engineer earning $90,000 CAD in Toronto can send $1,000 per month back home and barely notice it in their budget. That $1,000 per month — roughly 1.55 million naira — is more than most senior engineers earn in Nigeria. The remittance alone exceeds the local full-time salary.
| Scenario | Monthly Remittance (USD) | Annual Value in Local Currency | Equivalent Local Salary Rank |
|---|---|---|---|
| Engineer in Canada, family in Nigeria | $1,000 | 18.6M NGN | Top 3% of earners |
| Nurse in Australia, family in Philippines | $800 | 576,000 PHP | Top 10% of earners |
| Accountant in UAE, family in Pakistan | $700 | 2.52M PKR | Top 8% of earners |
| Doctor in UK, family in Egypt | $1,200 | 588,000 EGP | Top 5% of earners |
This is not about greed or materialism. This is about a structural economic reality where the same human being, with the same skills, doing roughly the same work, can generate 5x to 15x more economic value — for themselves and their families — by being located in a different economy.
The Profession-Specific Inflation Trap
Different professions experience the inflation trap in different ways, but the pattern is consistent across all of them.
Healthcare workers in Nigeria and Pakistan face a double burden. Their salaries are paid in local currency, but the medical equipment they need, the continuing education they pursue, and the pharmaceutical products they interact with are all priced in dollars or euros. A nurse in Lagos earning 3.5 million naira per year watches the cost of a basic stethoscope rise from 15,000 naira to 45,000 naira in three years — not because stethoscopes got more expensive globally, but because the naira collapsed.
Teachers and academics face a version of this that is especially cruel. University lecturers in Nigeria went on strike repeatedly between 2020 and 2024, each time seeking salary adjustments that had already been eaten by inflation before the negotiations concluded. The Academic Staff Union of Universities (ASUU) documented that the real value of a professor's salary in 2025 was approximately 35% of its 2015 value.
Accountants and finance professionals have the peculiar burden of understanding exactly what is happening to them in quantitative terms. They can calculate their own purchasing power erosion with precision. A chartered accountant in Karachi can tell you that their real hourly rate, adjusted for inflation, has declined by 8.2% per year for the past four years. Knowing the math does not change it.
Inflation Impact by Profession (Nigeria, 2020-2025)
| Profession | Avg. Nominal Raise (Annual) | Inflation Rate | Real Change | 5-Year Cumulative Loss |
|---|---|---|---|---|
| Software Engineer | 15-20% | 22-34% | -7% to -14% | -30% to -50% |
| Doctor (Public Sector) | 5-10% | 22-34% | -17% to -24% | -58% to -72% |
| University Lecturer | 3-8% | 22-34% | -19% to -26% | -63% to -77% |
| Chartered Accountant | 10-15% | 22-34% | -12% to -19% | -46% to -62% |
| Registered Nurse | 5-10% | 22-34% | -17% to -24% | -58% to -72% |
| Civil Engineer | 8-12% | 22-34% | -14% to -22% | -50% to -68% |
| Marketing Manager | 10-15% | 22-34% | -12% to -19% | -46% to -62% |
Public sector workers are hit hardest because government salary adjustments are political, slow, and never keep pace with inflation. But even private sector workers in the best-paying industries — technology, oil and gas, banking — see real declines when inflation exceeds 20% year after year.
The Housing and Asset Gap
Beyond salary, there is a critical difference in how inflation interacts with asset ownership across countries. In developed economies, moderate inflation often benefits homeowners: their mortgage is fixed, but their property value rises with inflation. Their real wealth increases.
In high-inflation developing economies, the opposite dynamic often plays out. Property prices in dollar terms may stagnate or decline even as nominal prices rise, because the currency is falling faster than assets can appreciate. A professional in Lagos who bought a house for 25 million naira in 2020 may see it valued at 60 million naira in 2025 — but in dollar terms, it went from $65,000 to $39,000.
| Asset | 2020 Value (NGN) | 2020 Value (USD) | 2025 Value (NGN) | 2025 Value (USD) | Real Change (USD) |
|---|---|---|---|---|---|
| 3-bedroom house (Lagos) | 25,000,000 | $65,000 | 60,000,000 | $39,000 | -40% |
| Savings (5M NGN deposited) | 5,000,000 | $13,000 | 6,500,000 (with interest) | $4,200 | -68% |
| Stock portfolio (NSE) | 3,000,000 | $7,800 | 5,500,000 | $3,550 | -55% |
Compare this with a professional in Toronto who bought a condo for CAD 500,000 in 2020. By 2025, it might be worth CAD 600,000 — and in USD terms, the gain is real because the Canadian dollar held relatively steady. Their mortgage balance decreased, their equity increased, and their net worth grew. Inflation, in this context, worked for them rather than against them.
The Five-Year Decision
If you are a professional in a country experiencing persistent negative real wage growth, the relevant question is not "am I doing well compared to my peers locally?" You probably are. The relevant question is "what will my financial position look like in five years if the current trajectory holds?"
Because if inflation continues at 20%+ and your raises average 12%, you will have lost roughly 35-40% of your current purchasing power in five years. Your savings — if they are in local currency — will have lost even more. And the experience you are accumulating will be worth less in global terms, not more, because the conversion rate keeps moving against you.
This is not pessimism. It is arithmetic. And it is the arithmetic that explains why highly skilled professionals across Africa, South Asia, and Southeast Asia are increasingly looking at their careers through a global lens rather than a local one.
What the Data Actually Tells Us
The gap between nominal wage growth and real wage growth is the single most important number in your career, and almost nobody tracks it. If that number has been negative for three or more consecutive years, no amount of job-hopping, skill-building, or side income will close the gap. The system itself is the constraint.
The countries where that number is consistently positive — where your salary genuinely buys more each year — are not utopias. They have their own challenges: high housing costs, competitive job markets, cold winters, cultural adjustment. But they share one fundamental feature: the economic system rewards your effort rather than eroding it.
That is not a small difference. Over a 20-year career, it is the difference between building generational wealth and running in place. And the data on which side of that line each country falls is neither ambiguous nor controversial. It is published, updated annually, and available to anyone willing to look at it honestly.
The question is not whether the gap exists. The question is what you do with the information.
