MINIMUM WAGE

Balance pay hike and cost of doing business

In Summary
  • Labour is a key component among the factors of production and needs to be motivated to boost production.
  • However, as the government raises the minimum wage it must equally cushion employers to make their enterprises profitable.
Crowd cheers after President Uhuru Kenyatta announced a 12 per cent minimum wage increase for all labourers during Labour Day celebrations at Nyayo Stadium on May 12, 2022.
Crowd cheers after President Uhuru Kenyatta announced a 12 per cent minimum wage increase for all labourers during Labour Day celebrations at Nyayo Stadium on May 12, 2022.
Image: CHARLENE MALWA

Times are tough and workers in Kenya need to be cushioned against the high cost of living.

Inflation just hit 6.47 per cent in April from 5.39 per cent in January, with indications that it will maintain an upward trend.

Food prices, cost of fuel and electricity, cooking gas, water, housing and transport have all gone up, yet wages remain stagnant.

The injury inflicted on the economy by the Covid-19 pandemic greatly contributed to stunted economic growth in 2020 and 2021. But with the opening of trade globally and in Kenya, there is hope for a rebound. 

Labour is a key component among the factors of production and needs to be motivated to boost production.

However, as the government raises the minimum wage it must equally cushion employers to make their enterprises profitable.

Kenya's tax regime, considered to be the most punitive in East Africa, remains a stumbling block for many business operations.

Multiple licences and levies both at the national and county levels push up the cost of doing business, making it difficult to stay afloat.

Employers also grapple with high cost of electricity, fuel and raw material. This coupled with high taxes and levies kill the goose that lays the golden egg.

Kenya must ease the cost of doing business to enable employers to review salaries and wages to match the cost of living. 

Quote of the Day: “Before all masters, necessity is the one most listened to, and who teaches the best.”  

Jules Verne

French newspapers published lists of the French writer's unpublished work on May 2, 1905

 

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