Pay decent salaries to motivate workers

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EDITORIAL

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Labour Day has traditionally been associated with wage increase especially for the low-income earners. But things were different this time round.

On Wednesday, the government failed to announce any pay rise for the workers, instead pushing the mandate to relevant industrial bodies to deal with the matter.

In the countdown to Wednesday’s celebrations, Central Organisation of Trade Unions (Cotu) secretary-general Francis Atwoli had upped the ante, calling on the government to award workers a 15 per cent pay raise to cushion them against inflation and numerous levies eating into the incomes.

To be sure, the government’s own data shows that inflation has risen in the past few months, hitting 19 per cent as at the end of April.

Matters have not been made any better with the erratic rains that are bound to depress agricultural productivity, the economy’s mainstay and the only source of upkeep for the majority of citizens.

But the government did not accede to the workers’ demands, thus setting the stage for confrontation with the unions.

Earlier, the Federation of Kenya Employers (FKE) had flatly rejected Cotu’s proposal, arguing that any salary increase was set to raise the cost of labour and production and stifle growth. Both the government’s and FKE’s position was not surprising.

Labour economics is dicey. Low pay demotivates workers, contracts productivity and hence outputs. Conversely, high labour pay pushes up the cost of production and shrinks sales and incomes.

When it becomes inescapable, employers resort to layoffs, pushing many to penury. It’s for this reason that labour matters have to be handled carefully to prevent the pendulum swinging extremely to one end.

A critical challenge for industrial relations is the huge discrepancies in remuneration.

A majority of workers, especially those at the base of the pyramid, are paid woefully low salaries and without other allowances to cushion them against the vagaries of the economy.

Contrastingly, a few top dogs earn immensely huge salaries and generous allowances, creating a disequilibrium in the labour market and whose result is discontent among the lowly-placed.

Raising salaries, however, requires growth of the economy in addition to minimal taxation and levies.

In our circumstances, the economy is stagnating and worse, the government is always imposing all sorts of levies on the few employed, piling up pressure on their incomes.

For example, the proposition to introduce housing levy calculated at 1.5 per cent of the salary is a misnomer in an environment where salaries are stagnant.

In the circumstance, the government must work on improving the economy and seal loopholes through which public resources are lost and create an environment where firms can do business, thrive and pay decent salaries to motivate workers.



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