Minimum wage intact despite high cost of living
Tuesday May 02 2023
Workers have missed out on a pay increase despite the high cost of living that is squeezing household budgets.
President William Ruto was on Monday silent on calls by the workers’ lobby, Central Organisation of Trade Union (Cotu), to review the minimum wage in his first Labour Day celebration as Head of State.
Dr Ruto’s decision handed employers a reprieve from increased salary costs with the head of State instead outlining a raft of measures meant to ease the high unemployment rates and lower the cost of living.
A high cost of living that has squeezed household budgets and stagnant wages had fuelled the push for a review of the minimum wage ahead of Monday’s celebrations.
Read: Uhuru upsets employers with 12pc salary rise
The Federation of Kenya Employers (FKE) had pleaded with Dr Ruto not to review the basic pay for a second consecutive year, citing the need to protect businesses from increased costs.
“We ask that before any changes are made, we are proposing a lead time of one year be given for businesses to be able to plan and adjust their budgets and restructure their financial flows to meet these new costs,” Jacqueline Mugo, the FKE executive director had said.
Dr Ruto said that the government will continue to lower the cost of basic commodities in a bid to cushion workers besides exporting human labour to nations such as Germany and Canada to lower the high unemployment rates.
Inflation eased to 7.9 percent last month from 9.2 percent in March on moderation of growth in food prices.
This is, however, still above the preferred government target band of 2.5 percent to 7.5 percent, prompting the continued calls for a fresh review of the basic pay.
Dr Ruto’s predecessor, Uhuru Kenyatta, increased the country’s minimum wage by 12 percent last year, ending a freeze that lasted three years.
The review increased basic minimum wage rise from between Sh13,572.90 and Sh230, 627.45 to between Sh15,201.64 and Sh258,302.24 for workers in Nairobi, Mombasa and Kisumu.
A review of the minimum pay mainly benefits low-cadre workers such as domestic workers, cashiers, drivers, cleaners, salespersons and property caretakers.
Regular pay growth in recent years has been dwarfed by consumer prices rising even faster with the lowest-paid Kenyans being the hardest hit.
The FKE had also hinged its push on the labour laws that bar wages from being reviewed more frequently than once every two years.
Delays in setting the wages council also made it increasingly unlikely for a second consecutive review in the basic pay.
Read: Inflation fuels push for pay rise
The council — made up of workers and employer representatives as well as three independent members — makes recommendations to the Labour minister on minimum salaries.
A wages council would normally factor in inflation, the status of the economy, employers’ ability to pay and the need to encourage fresh investments before making a recommendation on a review of the minimum wage.