Kenyan workers’ real wages ‘lower now than 10 years ago’

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Economy

A crowd at a past political rally
A crowd at a past political rally. FILE PHOTO | NMG 

When wages are adjusted for inflation, Kenyan workers are earning less than they did 10 years ago, the United Nations’ International Labour Organisation (ILO) finds in a report released on Monday.

The rate of change in real wages — a term used in the report to refer to inflation-adjusted monthly earnings — dropped by 1.6 per cent in Kenya from 2008 to 2017, the ILO global study shows.

The fall in real wages was even steeper last year for Kenya, declining by 2.9 per cent, the report notes.

It can thus be inferred from the ILO report that Kenyan wage workers have not benefited financially from the economic expansion in recent years.

Kenya’s gross domestic product grew between five and six per cent annually from 2013 through 2017, according to the World Bank.

Kenya lags regionally in real-wage average growth rates, the ILO study shows. Among the 24 sub-Saharan countries included in the report, real wages increased 2.7 per cent during the past five years.

Real-wage rates rose most sharply in that period in Senegal (32.3 per cent), while falling most precipitously in Tanzania (-9.5 per cent), the report shows.

Citing the Kenyan National Bureau of Statistics as its source, the ILO reports that nominal wages — those not adjusted for inflation — have grown substantially in Kenya, rising from an average of Sh42,886 per month in 2013 to Sh57,008 last year.

The ILO report cautions that “wage employees in Africa represent only a limited proportion of these countries’ working populations”.

The study does not present estimates for changes in earnings among workers in countries’ informal sectors.

Although the new ILO report focuses on disparities in earnings between men and women, the study contains no data for the gender pay gap in Kenya specifically or in sub-Saharan Africa as a whole.

Globally, the UN agency says, women are paid about 20 per cent less than men.

The causes for the gender gap are not fully understood, the ILO says.

But the report shows that motherhood brings about a wage penalty that can persist across a woman’s working life. Fatherhood, by contrast, is generally associated with a wage premium, the study finds.

Worldwide, the overall rate of growth in real wages slowed to 1.8 per cent last year from 2.4 per cent in 2016.

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By Kenyan Digest

The Kenyan Digest Team