How ILO warning on global wages decline is severely pounding Kenyans on payroll

The global inflation crisis paired with roller coaster economic growth and an outlook clouded by uncertainties have led to a decline in real wages around the world, according to a new report published by the International Labour Organization (ILO).

The 2022-23 Global Wage Report indicates that global real monthly wages fell 0.9 percent in 2022 on average, marking the first decline in real earnings at a global scale in the 21st century.

“The multiple global crises we are facing have led to a decline in real wages. It has placed tens of millions of workers in a dire situation as they face increasing uncertainties,” ILO Director-General Gilbert F. Houngbo said in a statement, adding that “income inequality and poverty will rise if the purchasing power of the lowest paid is not maintained.”

Data by Metropol Harvest indicates that Kenya’s minimum wage in five years to 2021 has been on an upward trajectory from Ksh.8,585 in 2017 to Ksh.9,014.

Under the Regulation of Wages (General) (Amendment) Order 2022, minimum wages should range from Ksh.8,109.90 per month to Ksh.34,302.75 per month, up from the previous range of Ksh.7,240.96 per month to Ksh.30,627.45 per month in May 2022.

Wage employment in the private sector increased by 6.8 percent to 1,984,200 persons in 2021 from 1,858,000 persons in 2020.

Within the public sector, wage employment increased from 884,600 persons in 2020 to 923,100 persons in 2021.

The nominal wage bill for private and public sectors rose by 8.4 percent from Ksh.2.2 trillion in 2020 to Ksh.2.4 trillion in 2021.

However, flaring inflation has left a number of Kenya’s companies juggling, whether to cut salaries for the longest or layoff staff to stay afloat.

This has seen thousands of Kenyans on payroll lose their jobs, with recent layoffs being witnessed in big media houses.

At Nation Media Group (NMG), seasoned journalists have been shown the door including Mark Masai and Managing Editor and Editors Guild President Churchill Otieno. Masai has been at NTV for 14 years. Dennis Okari announced his exit from NTV after more than a decade of stint.

Medical journalist Mercy Korir of Standard Group (SG) and her colleague Sharon Momanyi, seasoned Foreign Affairs editor Lilian Odera resigned.

Squeezed liquidity in market prompted the National Treasury in October to extend the hiring freeze in parastatals and government ministries, killing dreams of million of job-seeking Kenyans.

Civil servants are already facing deep cuts in allowances as part of Kenya’s commitment to the International Monetary Fund (IMF) to lower the public sector wage bill.

ILO finds that low-income earners are disproportionately affected by rising inflation.

“We must place particular attention to workers at the middle and lower end of the pay scale,” said Rosalia Vazquez-Alvarez in the report.

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Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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