Kenyan workers disappointed at low wage hike

By Standard TeamKenyan workers, suffocating under the weight of rising cost of living and especially burdened by skyrocketing prices of food and fuel, expected a 60 per cent wage rise. But all they got as Labour Day freebie was a marginal 12.5 per cent increase in minimum wage and zero in terms of general increment grade by grade. Worse still, the Government, in a bid to stem rising public cynicism and threats of street protests, whetted their appetite by promising on Sunday their situation would change.

Workers of Laxmanbhai Construction Company demonstrate their skills during Labour Day celebrations at Uhuru Park, Nairobi, on Sunday. Photo: Govedi Asusta/Standard

Members of Likasu Zangalewa troop lightened up the mood on during Labour Day in Nakuru, on Sunday. Photo: Boniface Thuku/Standard

As an appetiser, Prime Minister Raila Odinga announced after meeting President Kibaki last week all taxes on kerosene had been suspended, duty on petrol and diesel reduced by Sh2 and import duty on wheat and maize removed.
So, with the guarantee, they waited for the big party come on Sunday.
And even for the 12.5 per cent, which their union leaders declared a drop in the ocean and vowed to carry on pressure to get more from Government, Raila revealed it would have been worse were it not for public pressure.
He conceded at additional 2.5 per cent increase on the minimum wage was grudgingly given because of pressure by civil society and union groups, because the initial agreement was just a 10 per cent rise.
It was predictably an anti-climax for the Kenyan worker, especially the lowly graded who have had to bear the burden of soaring inflation and shrinking income levels, when Labour Minister John Munyes made his announcement at the national celebrations in Nairobi. The 60 per cent demand came from Cotu.
Munyes explained a decision was made that the minimum wage would be raised by 12.5 per cent from Sh7,334 to ShSh8,250.
But as the Labour minister was announcing the increment in Nairobi, Raila was in Kisumu confessing Government only wanted to give a 10 per cent increment.
The day was also gloomy for the salaried and business groups who Raila last week asked to prepare to dig deeper into their pockets as taxes will have to go up to plug the hole left by the pro-poor austerity measures and cutbacks he announced.
Traditionally, a salary raise in the lower cadres has a ripple effect in the higher levels as private and public sectors struggle to replicate the increases up the ladder.
Balancing act
Raila revealed the proposal for an additional 2.5 per cent came from Deputy Prime Minister Uhuru Kenyatta, who is the Finance minister.
"I received a telephone call from the Finance Minister who said we should re-adjust the award by 2.5 per cent and I concurred," Raila told a leader’s meeting in Kisumu.
Raila said union officials had initially rejected the 10 per cent offer and Government had to look for a "compromise" so that they do not negatively affect employers.
He said a balancing act was necessary to avoid measures that may precipitate job losses, especially given fears in government that employers may declare redundancies and job cuts to cut costs.
This was the latest attempt by the Government to arrest economic difficulties kicked off by an increase in fuel prices, in mid-April. Prices of essential commodities have since soared, provoking protests from civil society groups.
Consumer prices have increased two to three-fold per cent over the last two years and this has not been matched by significant increases in wages.
Kenya National Bureau of Statistics released Consumer Price Indices (CPI) and inflation rates from March 2010 to March 2011 indicate prices of food commodities have more than tripled since last year.
Munyes told workers poor performance of the economy could not sustain a substantial increase.
The crowds at Uhuru Park were impatient and were only keen to listen to the size of the increment, not the rationale and status of the economy. Some even started walking away when the minister seemed to take too long to announce the increment.
Subsidies
Only when the skies opened and the crowds sought shelter, did the minister cut short his speech to announce the increment, which raises the minimum wage to Sh8,250.75 for urban dwellers.
Cotu Secretary General Francis Atwoli had insisted on 60 per cent increment on the minimum wage, saying the cost of living has become unbearable for workers.
Last year the Government awarded a 10 per cent increment which pushed the minimum wage to Sh7, 334 per month.
"Last year we got ten per cent increase and this year the Government is giving 12.5 per cent, coming to a total of 22.5 per cent in two years," said Munyes.

Police restrain a protestor at Uhuru Park, Nairobi, during Labour Day celebrations on Sunday. Photo: Govedi Asusta/Standard

At Uhuru Park, Atwoli also called for subsidies on essential commodities to ease the burden on Kenyans. This would have seen the minimum wage rise to Sh11,737.
"We appeal to the Government to consider providing subsidies on essential commodities including pushing up the minimum wage by 60 per cent and giving a general wage increase of at least 10 per cent in order to cushion workers and Kenyans in general against harsh economic realities currently prevailing in the country," argued Atwoli.
Munyes said owing to economic hardships the Government has done what it considered best by awarding the increment.
"The Government has tried though there are still some problems. There is a huge gap between high income earners and low income earners," explained Munyes.
The burden of putting food on the table was palpable as a group of protesters briefly interrupted the flow of speeches when they gained entry into the Park.
Security personnel escorted them into the crowds where they kept on chanting unga! unga!
"These people who are making noise here lost their jobs at the Industrial Area and they are now jobless," said Atwoli, eliciting cheers from the crowd.
Atwoli also accused the private sector of making too much (profit) yet give so little to the Government.
He claimed Kenya Private Sector Alliance allied companies made Sh738 billion and only gave out ten per cent to the Government in taxes.
— Additional reporting by Peter Opiyo, Luke Anami and Anderson Ojwang’