Minimum pay raise a good reward but do much more

The real highlight of yesterday’s Labour Day celebrations is the 12 per cent increase in the minimum wage, which President Kenyatta granted workers.

Coming just about three months before the August 9 General Election, that is, in a way, his goodbye gift to the workers, who deserve every coin of it.

After a long wait, the country’s workers can finally afford to smile. The last time the minimum wage was reviewed was in 2018, which brought the pay to Sh13,500. It has now been raised to Sh15,200.

Just like the round of applause that echoed around the Nyayo National Stadium, where the President made the announcement, other workers are also celebrating.

The increment is meant to cushion workers against the high cost of living caused by the Covid-19 pandemic in the past two years and some external economic factors. A raging fuel shortage crisis has made life even harder for workers. But this is also a political gesture that is significant in an election year.

However, it’s bad news for employers as they will be forced to spend more to effect the higher wages amid tough economic times. Businesses have also been struggling due to Covid-19 and the fuel crisis. They can’t be expected to pay workers more when they barely manage to meet their costs.

At the height of the pandemic, many businesses had to shut down as others laid off workers to stay afloat. Some firms had just begun to see signs of recovery and, therefore, requiring them to pay their employees more is bound to have an adverse effect on the business.

Of course, the recovery will be slowed down by the fuel crisis. Businesses need incentives, including tax holidays, to ease the cost of doing business.

Other measures, like fewer taxes and less taxation, and help to access markets, are vital. Addressing the plight of workers and ignoring their employers would be counter-productive.

In the long run, what is required is to boost the economy and create more income to be able to grant workers a general wage increase while also enabling a decent return on investment.

While the new, higher minimum wage is welcome, a lot more needs to be done to ensure a conducive atmosphere for workers to be more productive and employers to pay them more.

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