The government has announced a 12 per cent increment in the minimum wage with effect from Sunday, May 1, 2022.
Making the announcement during the 57th Labour celebrations held Sunday at Nyayo stadium, President Uhuru Kenyatta said the saying the decision was aimed at cushioning the country’s workforce against the rising cost of living occasioned by several external economic factors.
Food prices for basic commodities have risen by an average of 20pc as a result of soaring food and fuel prices, a global phenomenon that has been aggravated by the ongoing conflict between Ukraine and Russia.
The directive was not well received by the employers who through the Federation of Kenya Employers (FKE) complained of a fragile labour market and depressed earnings citing high cost of operation for most firms and hard economic times.
FKE executive director Jacqueline Mugo who stopped short of blaming the government said it was time the push factors behind the high cost of living were addressed.
“Employers 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 such as fuel prices and an unfavourable tax regime.
She proposed that Kenyans earning Ksh. 35,000 and below be exempted from paying income tax (PAYE).
She revealed that talks between trade unions, FKE, and the Labour Ministry through the Wages Council had collapsed. COTU in particular was pushing for a 26pc hike which the federation termed as ill-advised.
“Workers have asked for an increase in the minimum wages but unfortunately, we were unable to meet an agreement. Employers seek a wage structure that only protects the lowest-paid worker but that will also increase production” she noted.
But President amid applause, called on the employers to make adjustments to protect workers welfare.
“I call on the private sector, please let us work in the same spirit, let us all make the adjustments, that will sustain the wellness of our labour force, let us sacrifice a portion of our profits,” he said.
The last review was in 2018 when the President announced a wage increase of 5 per cent.
At the same time, the President revisited the various measures taken by the Government to cushion Kenyans from the negative economic impacts of Covid-19, and regretted that the ongoing geopolitical conflict in eastern Europe involving Russia and Ukraine was slowing down the global economy’s recovery from the pandemic.
On the cost of fuel, President Kenyatta said the country’s fuel subsidy programme had ensured that Kenya maintained among the lowest pump prices in the world, and cautioned oil marketers against hoarding petroleum products.