What President Uhuru's pay deal means to you

President Uhuru Kenyatta PHOTO:COURTESY

Millions of lowly paid workers have been handed an 18 per cent pay rise in a bid to cushion them from the high cost of living.

President Uhuru Kenyatta announced the increase in the minimum wage, in the latest Jubilee charm offensive to woo voters ahead of the August 8 poll.

The President used the Labour Day celebrations to entice the country's labour force with a higher income amid biting economic times and with poor Kenyans complaining about the high cost of basic commodities such as maize flour.

Milk is retailing at Sh70 for a half-litre packet, while a 2kg packet of unga is selling at Sh125, a slight drop after tax was scrapped.

Kenyan workers who earn less that Sh100, 000 in bonuses and overtime shall also benefit from tax exemptions in a measure the Head of State said would cushion Kenyans against the high cost of living.

The minimum wage increase means that the lowest Kenyan worker in an urban centre will now earn Sh16,039 on average, up from Sh13,593, which was last adjusted two years ago.

TACKLE CHALLENGES

"We understand your daily struggles too and are working hard to tackle these challenges. We know that for two straight years, we have not increased the minimum wage. So, after consultation with key stakeholders, I have directed that the minimum wage be increased by 18 per cent," the President said.

But employers, through the Federation of Kenya Employers (FKE), reacted sharply against the increase, saying they expected a raise but not in the quantum announced.

"It was higher than we expected. Our appeal was that the increment be based on the cost of living, which is now at 11.4 per cent, so giving 18 per cent is almost twice that rate," FKE Executive Director Jacqueline Mugo said in a telephone interview.

She added that the increment would affect the cost of doing business and could end up hurting the ability of businesses to employ.

"This increment will have an impact on jobs. Already the corporate sector is hurting.

"The only positive part of the President's speech was the directive that we sit with the Cabinet secretary for Industrialisation to iron out issues faced by employees, though this should have come before the increment was done," Ms Mugo said.

There are different minimum wages that are gazetted for different jobs, the least being unskilled employees and the highest being artisans grade 1. This means that employers pay different minimum wages for different jobs.

Broken down, the 18 per cent rise on the current minimum wage as gazetted means that a house servant or cook working in the agricultural sector will now earn a minimum of Sh7,324, up from the Sh6,207.

The rise, which is one of the biggest minimum wage hikes in the last decade, will see a farm foreman and clerk now get paid Sh11,573 every month, while a section foreman and farm artisan will take home Sh7,493 and Sh7,668 respectively.

If you have employed a tractor driver on your farm, you will now pay him Sh8,131, up from Sh6,891. A combine harvester driver will now take home at least Sh8,959, while a lorry driver or car driver will pocket Sh9,401 every month.

But it is labourers in towns, former municipal councils, and other urban areas that will enjoy the highest minimum wages. This is because the cost of living in urban areas is relatively higher than rural areas.

If you are a general labourer in Nairobi, Mombasa, and Kisumu cities, expect to earn about Sh2,000 more to Sh12,927. A night watchman will now earn Sh14,441, while a cashier will take home at least Sh29,170. Jubilee rode on the Global Workers' Day to pitch for its re-election bid by highlighting its key achievements in the past four years.

Kenyan workers constitute the largest voting constituency and could tilt the election outcome. The President said the government had progressively increased the tax bracket to the current Sh13,475 in efforts to lighten the tax burden of Kenyan workers.

The wage increase announced by the Head of State, however, fell short of the 22 per cent demanded by the Central Organisation of Trade Unions (Cotu).

The President was quick to assure employers that the Government would engage all stakeholders to ensure that the increase does not eat into their profits, a risk that could raise the cost of doing business in the country and scare away investors.

"I know that employers are concerned about increased wages and the impact on the economy. I have asked the Cabinet secretary for Industrialisation (Adan Mohammed) to urgently convene a meeting with the stakeholders so that we can explore measures to cushion them from costs associated with non-labour factors," he said.

The celebrations at Uhuru Park grounds were turned into a campaign platform as the President and his deputy, William Ruto grabbed the latest opportunity to trumpet their achievements and take a dig at the Opposition.

Mr Ruto accused the Opposition of 'sharing positions' instead of stating its agenda ahead of the elections. "As we head towards election, we must be reminded that power is not about sharing positions by the elite. It is not the sharing of positions that will change Kenya, but the creation of jobs for our youth. As we go to the elections, Kenyans must watch carefully who stands for what," he said.

The Opposition last week named Raila Odinga as the NASA presidential candidate.

The President warned against incitement and violence ahead of the elections.

"As we enter the election season, we must remember that violence and discord has always been at the expense of the worker. They have led to layoffs, lack of investment, and suffering," he said.