Househelps’ minimum wage plan is not practical for average families

In the past Market Talk has suggested new sin taxes for consideration by the taxman. Today, let us review the proposed minimum wage for househelps in Kenya which has been set at Sh7, 500 a month.

Coming at a time when increasing cost of living is one of the major concerns among citizens the timing of the proposal is inappropriate. The other problem is the impact it would have on many of the working mothers who earn less than Sh30,000 a month. Many would have to stop working or opt for underemployment if the cost of domestic help is not left to willing buyer willing seller or status quo.

Reverse gains

I have heard some suggest they would opt to be housewives if it is not commercially viable to employ a househelp. This will reverse the gains made in increasing the number of working women. There may also be an influx of illegal cheap labour from the neighbouring countries, who would be more interested in the job than in the protection by government.

The move can also increase inflation as most urban households need a house help .I have listened to radio talk shows on the issue and public reactions which all indicate that the househelps are in reality already earning more. Their current payslip in Shillings can be seen. The sample pay slip suggests that they are already earning about half of the proposed amount.

The reality of the situation according to many of the employers including myself is that these house servants already fall in the taxable bracket if we apply the normal employment terms.

Some of the callers on the radio chat shows also included benefits such as training new recruits from the rural areas on handling gas cookers, club membership and annual bonus among others. This implies the suggested rates are far-fetched and fails to acknowledge the nature of the employment for house servants.

Some of the employers have implied that they would withdraw some of the benefits such as accommodation if they are to comply with the new guidelines .

Such directives should be avoided as they are likely to cause serious labour crisis while interfering the with the fabric of a functioning society. Still there is need for segmentation when such rules are introduced so that the prescribed rates acknowledge the varying living standards of different employers and prescribe different minimum wages for different households.

The education and training background of the servant should also be considered as more educated servant can be allocated more duties while providing a higher quality of service. Similar challenges have been said to affect a country’s competitiveness with some investors in the export processing zones requesting for exemption from minimum wage requirements in order to be to be competitive in the global market.

In Business Process Outsourcing sector some of the entrepreneurs have had to explain to global clients that paying a salary of Sh 30,000 to a clerk is a competitive salary in Kenya while an equivalent worker in the US maybe paid many times that and still fail to afford a househelp.

The idea of applying global remuneration standards especially for some job levels not only beats logic but it is also impractical.

On the other side of the coin, I have also heard many potential employers complain that since the introduction of the free primary education, the house helps have become more expensive.

From a marketing perspective, the househelp have some good level of control in the household spending and they are the influencers and decision makers of many brand choices in the house.

This procurement role is not adequately acknowledged in the marketing decisions related to such brands.

As we discourage minimum salaries for this category of workers, marketing professionals should see the opportunity provided by the increasing income and the huge household budget controlled by this group. You can take my word to the bank.

The writer is the Marketing Director at SBO Research. [email protected]