Extra minimum wage increase untenable

April 6, 2011

, KISUMU, Kenya, Apr 6 – The Federation of Kenya Employers (FKE) has objected to calls by the Central Organisation of Trade Unions to raise the minimum wage, saying it was untenable.

FKE Executive Director Jacqueline Mugo said that employers had increased wages less than 12 months ago and it would not be economically viable to do the same this financial year.

Ms Mugo said that neither the economy nor the industry could sustain a salary increment at this point.

She added that determination of minimum wages and other terms and conditions of employment in the formal sector are anchored on the provisions of wage guidelines.

“The guidelines outline factors that should be considered in fixing wages and other terms and conditions of employment,” said Ms Mugo.

The federation said it supports a wage adjustment process that is systematic and should address all indicators that control productivity and competitiveness of the local investments.

“As much as the country is going through hard economic times, it should be noted that the investors are not finding it any easier than the rest of the stakeholders,” she said.

She said that the performance of the key sectors in the country that is agriculture and manufacturing have remained negative.

Addressing the press after officiating at the Western Kenya FKE annual general meeting, Ms Mugo said that the performance of the agricultural sector has remained negative following the 2008 post election crisis.

In 2008, the sector registered negative 5.4 percent growth from 2.0 percent growth achieved in 2007.

She further noted that pries of fuel is affection both employers and employees noting that this has had a negative impact on the cost of doing business in terms of reducing company earnings.

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