There is a difference between the national living wage and minimum wage. The National Living Wage is higher than the National Minimum Wage where workers get it if they’re over 25.
Whereas The National Minimum Wage is referred to as the minimum pay per hour almost all workers are entitled to. This means workers are guaranteed a certain hourly pay helping to reduce relative poverty.
Earlier, the workers had demanded a 22 per cent raise in minimum wage, without which they threatened to punish Mr Kenyatta with an electoral defeat. The minimum wage, initially at Kenya shillings 10,955, has been raised to shs12, 926 (about Uganda shs452, 221).
For the last two years, President Kenyatta had not met these demands made by workers; to increase the minimum wage, until yesterday during the Labour Day celebrations held in Uhuru Park, Nairobi where he increased it by 18 percent.
Speaking in the same event the secretary-general of the Central Organisation of Trade Unions (Cotu) Mr Francis Atwoli, advised Mr Kenyatta to review the minimum wage for workers. (Daily Nation).
Mr. Kenyatta also said that workers on the lower income bracket ; those earning Ksh 13,400 or below, shall no longer be taxed. This also includes bonuses and overtime.
Who is eligible for the minimum wage?
1. Workers must be at least school leaving. One must be 25 or over to get the National Living Wage.
However we should note that contracts for payments below the minimum wage are not legally binding. The worker is still entitled to the National Minimum Wage.
2. Workers are also entitled to the correct minimum wage if they’re: casual laborers, part-time, agency workers, trainees, workers on probation, disabled workers, foreign workers, workers and homeworkers paid by the number of items they make.
3. Apprentices – this is a person who is learning a trade from a skilled employer, having agreed to work for a fixed period at low wages.
They are entitled to the correct minimum wage for their age if they’re:
* Over 19 and have completed the first year of their apprenticeship.
Who is not eligible for a minimum wage?
i) Company directors
ii) Volunteers or voluntary workers
iii) Self-employed people running their own business
iv) Workers on a government employment programme.
However, a minimum wage could have advantages and disadvantages.
Helps Families– Majority of the minimum wage earners are working parents who are raising children. Without a minimum wage, these workers may be forced to work for less money.
Reduces Tax Burden- An unemployed worker is given welfare, rent assistance and food stamps in many states. With minimum wage, the need for public assistance is lowered and this reduces the tax burden on the community and the state.
Employment Incentive- A minimum wage gives an unemployed person incentive to take a job because he knows what his minimum pay will be, according to economics website Economics Help.
An unemployed person can compare the money he gets from public assistance and compare it to the minimum wage to determine the financial incentive to taking a job.
Business Budgets– With a minimum wage in place, a small business owner knows what he will be expected to pay per hour and he can create new jobs with his company based on this budgeting information.
Unemployment – If labour markets are competitive a minimum wage could cause unemployment because firms will demand less labour, and higher wages may encourage more workers to supply their labour.
Inflation – This is because firms face an increase in costs which are likely to be passed on to consumers.
Limited Impact on Relative Poverty – Many ho benefit from the minimum wage are second income earners and therefore the household is unlikely to be below the poverty line.
In conclusion, the President urged employers to ensure their workers are safe and said State will soon embark on inspection of safety at work place to ensure compliance.