Casual jobs lock young Kenyans in poverty trap

Millions of Kenyan youths joined the ranks of the working poor in the past five years as employers turned to temporary or contractual jobs to cut costs – stalling the social progress that usually comes with employment.

Temporary employment, which comes without key benefits such as pension, health insurance or access to loan facilities, has left the majority of young people either underemployed or underpaid locking them up in the bottom quarter of the social pyramid, according to the Institute of Economic Affairs (IEA), a Nairobi-based think tank.

Kenya has had one the most flexible labour markets in Africa since the country embarked on economic liberalisation in the early 1990s. Market data, however, shows that deregulation deepened in the past five years resulting in a steep rise in the number of part-time, contract, and out-sourced workers with serious ramifications on the social front.

Official statistics show that casual employment grew by 13 per cent last year compared to a five per cent growth in 2007, reflecting increasing preference for casuals. Regular employment dipped 2.9 per cent during the same period.

This trend has seen the proportion of casual workers in the formal sector of the economy increase gradually from 17.9 per cent in 2000 to 32.2 per cent last year.

“Hiring casuals contrasts sharply with the country’s desire to reduce poverty and enhance social protection,” said Katindi Sivi, a programme officer at IEA.

Inuka Kenya Trust, a civil society organisation that co-authored the labour market report with IEA, says social stagnation in employment combined with the army of the unemployed have become the biggest threat to Kenya’s long term stability requiring immediate action.

“We are sitting on a time bomb as more youths continue to be out there without jobs while those who are employed earn peanuts with little personal advancement,” said John Githongo, the chief executive of Inuka Kenya Trust. “The danger is that unemployment or underemployment is extending the burden of dependency on parents, diminishing self-esteem fuelling frustrations and making crime an attractive option,” said Mr Githongo.

Besides, underemployed or poorly paid employees often become incapable of starting families, providing their children with good healthcare or educating their off-springs – stalling social progress in the long term.

IEA says Kenya’s dependency ratio has increased in the recent past as more young adults – many of them in poorly paying jobs – continue to rely on their parents for financial support.

Kenya’s rate of creating formal sector jobs has continued to trail the number of young people entering the labour market and analysts say that trend will continue even if economy grew at the rate of more than 10 per cent annually.

The cascading of large numbers of young people to low-paying informal sector jobs is seen as one reason why Kenya’s income disparity has been widening, a risk to social stability that is one of the key pillars of Vision 2030.

Census results released in September showed that 2.2 million Kenyans, the majority of them youths are unemployed and are actively seeking jobs in an economy where growth slowed down to 1.6 and 2.6 per cent in 2008 and 2009, respectively.

The economy generated only 445,000 jobs in 2009 less than the 2008 figure of 475,000 and 486,000 in 2007. Employers said the prevailing regulatory and business climate that is characterised by high cost of investment and bureaucracy has made permanent employment untenable, at least in the medium term.

“We recognise that youth unemployment is a crisis but employers are just responding to the realities of the labour market,” said Betty Maina, the chief executive at the Kenya Association of Manufacturers.