SRC chairperson Sarah Serem said her team had computed the figures after studying pay structures in 10 economies.
SRC had also surveyed Kenya’s labour market where it discovered huge disparities between private and public sector salaries.
The team then designed the new public pay structure from that peak, fixing the Deputy President’s salary at 85 per cent of the president’s while the third tier pay was fixed at 80 per cent.
The Salaries and Remuneration Commission (SRC) on Monday made public how it set the State officers’ salaries as it hit back at politicians seeking its disbandment.
SRC chairperson Sarah Serem said her team had computed the figures after studying pay structures in 10 economies — five East African Community states, the US, UK, Canada, Ghana and South Africa.
Mrs Serem said the SRC had also surveyed Kenya’s labour market where it discovered huge disparities between private and public sector salaries.
“The shocking finding was that the public sector, which is basically a consumer was paying higher wages than the private sector, which is the wealth creator,” Mrs Serem said, citing a KIPPRA survey which found that most workers perceived public sector jobs as a source of wealth rather than service delivery.
The SRC spoke four days after Parliament constituted a Committee on Delegated Legislation to kick-start the process of disbanding it. Members of Parliament have accused the commissioners of acting in breach of the Constitution by fixing their pay arbitrarily.
On Monday, Mrs Serem said that being an independent body, the SRC would not bow to threats and intimidation having designed the new salary scales scientifically and in accordance with law.
Kenya has the highest purchasing power parity (PPP – a measure that compares the cost of goods and services in one country with another) of 194 compared to South Africa’s 27, Rwanda’s 72.5 and below 10 for most rich countries. This means that out of the 10 economies surveyed, Kenya had the widest income disparity.
The salaries team then calculated an average PPP for the 10 countries which it then multiplied with the country’ GDP per capita to get $170 (Sh14,450).
The SRC said it had linked its decisions to constitutional standards of equity, objectivity, fairness, productivity and performance to arrive at the maximum pay for the highest public officer (President) which is Sh1.65 million).
The team then designed the new public pay structure from that peak, fixing the Deputy President’s salary at 85 per cent of the president’s while the third tier pay was fixed at 80 per cent. The remaining scales were down by one percentage point each to the lowest tier of state officers.
To determine each state officer’s monthly pay, the SRC also considered the number of employees in a particular tier, skills, problem solving capacity, communication and the impact of decisions made at each level.
Mrs Serem ruled out immediate review of the formula saying sustainability tests showed that state would save Sh1.4 billion and reduce disparity in public wages by more than 50 per cent using the set pay scales. It remains to be seen how the MPs received the SRC’s explanations.
The Sarah Serem-led commission has been under fire from politicians since it gazetted new salary guidelines for public officers in March 1, 2013 just three days before the March 4 general election.
“Parliament was engaged throughout the stages of determining the new pay structure,” said Peter Oloo Aringo, the commissioner representing the Parliamentary Service Commission at the SRC.
Under the new pay structure, a member of the 11th Parliament is entitled to a basic salary of Sh543,000, down from the Sh851,000 that their counterparts in the 10th parliament earned. County representatives are entitled to Sh79,000 per month.
The political class has vigorously opposed the new pay structure with MPs threatening to remove the salaries team from office. The county representatives have also boycotted parliamentary sessions seeking to force a review of their salaries.
The union representing teachers, doctors and civil servants have been watching the developments keenly waiting to protect their own turf.
On Monday, Mrs Serem stood her ground saying the Sh458 billion (50.4 per cent of projected 2013/14 revenue collection) currently paid to about 700,000 public servants was unsustainable for a government that has set to achieve between seven and 10 per cent annual growth.
To achieve this level of growth, it was imperative that public wage were kept at sustainable level with part of the scarce resources being directed to priority areas of economic development.
“This level of pay to just 1.6 per cent of total population is not only huge but also stands in the way of the government to implement its development agenda,” Mrs Serem said.
The team said it was ready to review pay structure with improvement in economy but warned that clamour for higher salaries could discourage investments as inflation and labour cost go up, eventually eroding spending power.
