Kenya's minimum wage and wage differentials are important issues in the country's labour market. It has a formal minimum wage system that includes the government in consultation with the National Wage Council. The National Wage Council is a body established under the Labour Relations Act that provides advice to the government on minimum wage and other wage related issues.
It is almost close to impossible to talk about minimum wage without touching on the wage differential. The main reason for wage differential in Kenya is the difference in education, trainings and skills needed between the various occupations.
There is a really large wage differential between high-skilled and low-skilled workers in our country. The skilled workers such as those in the finance, technology and engineering earn significantly more due to the extensive training and education as compared to the low-skilled workers in the agriculture, manufacturing and domestic sectors. The National Wage Council is therefore meant to set the minimum wage with an aim of protecting vulnerable workers in the labor market, particularly the lower-paying sectors and those with fewer skills and qualifications such as those in the agriculture, manufacturing and domestic sectors.
Minimum wage has been defined as the lowest remuneration that an employer can legally pay their employees for work done for a given period of time and that can only be improved by Collective Bargaining Agreement (CBA) and/or any other negotiation. According to International Labour Organisation (ILO) Convention 131, all ILO members are mandated to establish a system of minimum wages, which covers all groups of wage earners whose terms of employment are such that coverage would be appropriate.
In Kenya, the minimum wage is fixed based on regions and occupations. For example, a number of occupations in the agricultural sector are incorporated in the minimum wage setting. The minimum wage also provides the number of hours a worker is supposed to work per week. The minimum wage in Kenya allows a worker to work for 52 hours per week.
The ILO also highlights the purpose of minimum wage as to ensure all employees are protected against precarious work. The minimum wage is also used to ensure equality between men and women by ensuring all employees have access to equal remuneration for work of equal value which is in alignment with ILO Convention 100 (which has been ratified in Kenya) and the Employment Act, Section 5(5).
By establishing and reviewing the minimum wage to meet the needs of workers, Kenya will be moving towards the achievement of Sustainable Development Goals (SDG) 1, on No Poverty, SDG 5 on Gender Equality and SDG 8 on Decent Work and Economic Growth.
During last year's Labour Day celebration, which is commemorated annually on May 1, the former President Uhuru Kenyatta increased the minimum monthly wage by 12 per cent, which was from Sh13,572 to Sh15,201 for cities, Sh14,025.40 for all former municipalities and Sh8,109.90 for all other areas. The 12 per cent increase was out of the 24 per cent proposed by the Central Organization of Trade Union- Kenya.
The minimum wage in Kenya still falls far short of what is needed to support a family, especially in urban areas where living costs are higher and getting higher by the day.
Currently, the inflation rate has increased to 9.2 per cent from 7.1 per cent in May 2022 and Consumer Price Index increased to 131.18 from 123.12. The cost of living keeps going up day by day making it hard for workers to meet their needs. As a union, we encourage creation of employment but our main priority is ensuring Kenyan workers have decent work and fair remuneration.
With the high cost of living, we urge the government to increase the minimum wage by at least 24 per cent to protect workers from further erosion of their purchasing power and at the same time guarantee the competitiveness of our economy.
The writer is Kudheiha secretary general