NAIROBI, Kenya May 1 – Federation of Kenya Employers (FKE) Executive Director Jacqueline Mugo says employers will not increase the minimum wage, citing depressed earnings due to hard economic times, including the high cost of operation, for most firms.
Speaking during this year’s Labour Day celebrations, Mugo said the government should maintain the status quo to allow the economy to recover.
She urged employers to seek a wage structure that not only protects the lowest-paid worker and supports fairness but also helps increase productivity and economic growth, and is economically sustainable.
“We take note of the high cost of living that is making life difficult for us all. We request the government to focus on addressing the push factors behind the high cost of living. The push factors like the high cost of fuel, the disruptions in supply chains of essential commodities, the low food production, and the unfavorable tax policy need to be looked at,” Mugo explained before President Uhuru Kenyatta announced a 12 percent minimum wage increase.
The FKE chief added; “This can be done by raising the lower tax bracket to say Sh35,000 or done progressively over the years and the tax relief raised to Sh3,500 per month. This approach is more efficient and effective in helping the lower-income earners in an economy with very high informality like Kenya.
She stated that Kenya’s employment situation is worrying with almost 85 per cent of wage employees in Kenya are underemployed in informal sector jobs after over 2 million workers lost their jobs in 2020 and 2021 due to the Covid-19 pandemic.
“Our wages policy should support the expansion of formal employment to absorb the unemployed youth in Kenya. Increasing labour costs will only exacerbate the situation,” Mugo said
Workers through their trade unions have been pushing for increased wages.
