The rise of the working poor: KIPPRA calls for review of statutory minimum wage
The country is grappling with a rise in the number of people classified as ‘working poor’, meaning their wages are far below the minimum required to meet the basic needs of food, shelter and clothing. This was revealed by the Kenya Institute of Public Policy Research and Analysis (KIPPRA) in its Kenya Economic Report 2023 released in Nairobi on Thursday morning.
The report shows that inflation-adjusted earnings from both the public and private sectors have declined, leaving the majority of Kenyans unable to make ends meet. Data from KIPPRA shows that real earnings in the public and private sectors declined by 1.0 per cent and 4.0 per cent respectively in 2020 and 2021.
“Most workers still earn below minimum wage, accounting for 77.0 percent of total workers. While minimum wage increased by 12 percent in 2022, the cost of the minimum basket rose by an average of 22 percent. In addition, the minimum wage in Kenya only covers about half of the living wage”, KIPPRA states in the report.
Kenya’s minimum wage was last revised upwards on 1 May 2022, when former President Uhuru Kenyatta ordered a 12.0 per cent increase, bringing the minimum wage for domestic workers in Nairobi, Kisumu and Mombasa to Sh15,201. KIPPRA is now calling for an urgent upward review of the gazetted minimum wage to cushion the most vulnerable working Kenyans from the rising cost of living.
“Presently, the allocated minimum wage is inadequate to afford a decent living. The Wage Council, represented by COTU, FKE, and the government and the National Treasury need to review and recommend minimum wage that is aligned with the prevailing living wages based on trends in the cost of living and economic conditions”, KIPPRA states.
KIPPRA’s report shows that only four counties (Nairobi, Mombasa, Kiambu and Kajiado) spend less than 50.0 per cent of their household income on food, highlighting the pressure that falling incomes have put on households. Turkana and Wajir counties have the highest food expenditure as a proportion of total household expenditure at 76.2 per cent and 71.0 per cent respectively.
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