Economy

Inflation erodes private sector workers’ wages

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A shopper picks maize flour at a store. The cost of flour hit Sh150 per 2kg packet due to grain shortage. file photo | nmg

Private sector workers in reality earned less in 2016 than the 2015 take-home pay as employers kept annual wage increases below the rise in the cost of living, official data indicates.

The Economic Survey 2017 released on Wednesday showed that a private sector worker earned Sh52,444 per month on average, an increase of 5.7 per cent or Sh2,843 a month over the 2015  take-home pay.

That rate of adjustment fell slightly below the 2016 annual average inflation of 6.3 per cent.

At an average monthly pay of 56,924, the public sector employment retained its sheen over private sector jobs even as annual pay raise of 6.3 per cent technically left the purchasing power of government workers intact.

Of the public sector earnings, county government employees enjoyed the highest annual pay rise of 17.6 per cent last year followed by teachers at 8.1 per cent. Over the period, parastatals and State-controlled agencies awarded an annual pay rise of 7.2 per cent.

“Overall, the average wage earnings (for private and public sectors) grew by 5.9 per cent to Sh53,736.50 per month in 2016 compared to an increase of 10.1 per cent recorded in 2015,” said the Kenya National Bureau of Statistics.

The survey shows growth in wage employment generally slowed down over the period from 4.5 per cent in 2015 to 3.1 per cent last year.

In the public sector, the government frequently adjusts minimum pay for different professions mainly to honour collective bargaining agreements.

While the State did not adjust the minimum wage last year, President Uhuru Kenyatta has already signalled his plan to award another pay rise on May 1.