Hooray- Wage Increment vs Economic Growth! (Harleen’s Blog)

02 May

A few days to the Labour Day, the Prime Minister of Kenya- Mr aila Odinga announces the tax waive on kerosene.

Due to the rising costs of living the Central Organisation of Trade Unions threatened to strike if the minimum wage was not increased.

Labour Day and the President, Mr Kibaki announces a 12.5% wage increment. This seems like good news, only problem is that the Federation of Kenya Employers and Kenya Association of Manufacturers maintain their threat of not hiring anymore and push the increment onto their products for their consumers to bear.

This all seems the usual cycle of things, but why such a big deal?

Employers don’t realize that somewhere in the chain they are consumers too. But because they have a bigger wage bracket it doesn’t affect them too much. A common worker on the other hand can’t do much with the increment even though there is a tax waive on his most important commodity fuel, because other items go up too.

What is the best solution? The Government needs to be fair on both sides, if the employee gets a wage increment, the employer should get a waive on their business too. The economic cycle should be as balanced as possible. Easy to say, but the attempt must be paid, why should the Kenya Revenue Authority keep complaining they don’t collect enough tax? Doesn’t make sense to me, but what is strange is the fuel shortage going on most of today.

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Posted by on May 2, 2011 in Uncategorized


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