Textile Employers in Kenya Are Unhappy Over The 14 Percent Increment in Minimum Wages

Textile employers in Kenya are unhappy over the 14 percent increment in minimum wages announced by the Government on May 1, 2013.
 
Speaking to media, Chairman of Kenya Association of Manufacturers (KAM), Polycarp Igathe, said that any increments in wages that are not based on productivity will eventually affect the employees negatively as the firms will just increase the cost of the final goods to compensate. This will also reduce the competitiveness of Kenyan goods, internationally.
 
Currently, the minimum wage in Kenya is Sh9,780 (US$ 1160.12), which stands much higher than that in countries like Bangladesh with Sh5719 (US$66.5), Lesotho Sh4758 (US$56.44), and Sh6450 (US$ 76.51) in Cambodia and Ethiopia.
 
Mr. Igathe added that the Kenyan textile and apparel industry will be affected the most since it is the most labour-intensive sector of Kenya. The textile firms may tend to a major cut down in labour to survive this situation.
 
The textile firm owners will be left with no choice but to either completely shutdown their plants in Kenya or to relocate to countries that have cheaper cost of labour, he added.
 
Felix Otiato, spokesperson of The Federation of Kenya Employers, said the 14 percent hike is unsustainable in the current economic conditions of the country.
 
Betty Maina, Chief Executive of KAM, suggested that instead of increasing minimum wages, the Government should reduce the cost of living in the country by implementing tax reduction and by cutting down prices of food, fuel and basic amenities for living.