EDITORIAL: Use more structured way of determining wages

Workers follow the proceedings of a COTU meeting. The minimum wage has been raised by 18 per cent. PHOTO | DENNIS ONSONGO | NMG 

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Summary

• The 18 per cent raise announced on Monday also implies growth in real wages, having beaten average inflation rates of the past two years. 

After two years of stagnation, the government has raised minimum wages again.

The 18 per cent raise announced on Monday also implies growth in real wages, having beaten average inflation rates of the past two years. 

Inflation averaged 6.6 per cent in 2015 and 6.3 per cent in 2016 – meaning there is real gain in purchasing power for the ordinary worker, whose average household income has over the years fallen disproportionately.

But that is perhaps where the applause ends. This year’s annual wage adjustment – the highest since President Uhuru Kenyatta took office in 2013 – is generally suspect for a number of reasons.

First, it is not based on any framework or policy that can be invoked in future to award similar increases.

That President Kenyatta only showed up with top officials of his government to award a hefty pay rise three months to elections must raise a number of questions, if not just looking downright opportunistic.

Secondly, the process of fixing the minimum wage increase appears to have ignored the spirit of tripartite engagement that makes for healthy industrial relations.

While employers maintained, up to the last minute, that wage increases would destabilise the industry, labour unions too appeared to have been in the dark. Just hours to the announcement, the Central Organisation of Trade Unions was still asking for 22 per cent pay rise.

That makes the 18 per cent announced Monday appear more like a guesswork of a few people in government.

A sustainable wage increment springs from a free negotiation between employers and unions with government officials only acting as arbiters.

Lastly, the fact that unions were demanding such a hefty increment betrays lack of trust in the government’s ability to adjust the minimum wages in a more structured way and consistently as economic conditions may demand.

The unions appeared keen to make good use of the short period to elections. For industrial stability, the government needs to craft a clear wage policy that guarantees workers automatic raise in proportion to GDP growth and one which reflects inflationary adjustments.