The gap between the average pay in the public and private sector widened last year, underlining the civil service’s status as the best paying segment of the economy.
The difference in the pay grew to Sh8,172 per month, up from Sh5, 370 in 2012 and Sh2,333 in 2011.
This was driven by higher pay increments in the public sector compared to those offered by companies in what is set to embolden the government’s quest to shed jobs to keep the ballooning wage bill in check.
Public servants’ pay rose 16.7 per cent to an average Sh47,146 per month, up from Sh40,418 in 2012 while the private sector increased wages 11.2 per cent to Sh38,974 per month.
The average public sector pay surpassed that of the private sector in 2010, making the government an attractive employer given that it also offers a number of allowances not provided by companies.
“Annual wage earnings per employer in the public sector were slightly higher than in the private sector,” notes the Economic Survey 2013.
State think-tank Kenya Institute of Public Policy Research and Analysis (KIPPRA) said that allowances paid to civil servants have made the government the preferred employer and called for a radical review.
Currently, allowances have the effect of doubling employee’s pay and in some instances growing it by a factor of 10.
KIPPRA recommends capping of allowances such that they account for between 10 and 25 per cent of civil servants’ gross pay.
“The Kenyan public service is generally a better employer than the private sector because of its multiple allowances,” Mr John Omiti, executive director of KIPPRA said at the release of the study a few weeks ago.
The change in fortunes of government employees is partly attributed to the reforms that the Kibaki administration pursued since coming to power in 2003.
Key tenets of the reforms have been the introduction of private sector practices such as competitive hiring of top level civil servants and parastatal heads, performance-based pay and contracting that has seen a large number of professionals leave the private sector for government posts with competitive salaries.
Some labour market observers, however, attributed the change in fortunes of government employees to the relative strength of public sector trade unions and their ability to negotiate better pay with the government.
Together with the core civil service employees, teachers top the list of Kenyan workers who have received the most pay increments in the past two decades, causing a general rise in the public sector wages.
Official data shows that three units of government including the Teachers Service Commission (TSC), State corporations and county governments account for more than half of the national wage bill.
The wage bill stood at Sh521.6 billion or 13 per cent of GDP at the end of the last financial year, having risen from Sh458 billion in the previous year.
Teachers are being paid a total of Sh138 billion this financial year or a quarter of the wage bill, while state corporations are in second place with Sh83 billion.
Thousands of public servants could be out of jobs by end of March next year when the ongoing staff review exercise is expected to end.