Report: 42pc of formal sector workers earn below Sh50,000
Egerton University lecturers launch their strike over pay on Njoro Campus on October 17, 2022.
Nearly half of the formally employed Kenyans earn below Sh50,000 monthly, a new report shows.
The report by Kenya National Bureau of Statistics (KNBS) on the distribution of wage employment by sector and monthly income groups shows that 42.2 per cent of the 2.9 million formally employed Kenyans by 2021 took home a maximum of Sh49,999.
Examining how different categories earned between 2017 and 2021, the report shows that a large section of the working population is still earning low, in spite of the rising cost of living. Kenya had a total of 2,907,341 wage employees in 2021, out of which 1,227,104 earned less than Sh50,000, it adds.
The report looked at how different categories of workers earn in the public and private sectors, showing that the formal workforce has grown marginally over the past five years, from 2.79 million in 2017 to 2.9 million in 2021. The number had, however, peaked at 2.928 million by 2019, before Covid-19 struck in 2020.
It shows that employees earning up to Sh9,999 form the smallest category within the formal workforce, with 11,176 workers (0.38 per cent of the 2.9 million workforce) earning the amount by 2021. On the other hand, employees earning between Sh50,000 and Sh99,999 form the largest group within Kenya’s formal workforce, with a total of 1,321,404 (45.45 per cent) earning within the range in 2021.
In 2021, employees earning between Sh10,000 and Sh14,999 were 37,201 (or 1.3 per cent of the formal workforce), those earning between Sh15,000 and Sh19,999 were 52,034 (1.8 per cent) and 104,198 workers earned between Sh20,000 and Sh24,999. A total of 204,609 workers earned below Sh25,000, forming seven per cent of the workforce.
The report further shows that 2.9 per cent (84,407 workers) earned between Sh25,000 and Sh29,999, while 938,088 workers (32.3 per cent) earned between Sh30,000 and Sh49,999. Employees earning at least Sh100,000 formed 12.3 per cent of the workforce – 358,833 out of the total 2,907,341 workers.
The report further shows that the private sector dominates, with 68.25 per cent of its workers earning over Sh100,000 (244,917 workers) and 7,628 earning below Sh10,000, which could be due to its larger workforce than the public sector.
Only 20,018 employees in the national government earned over Sh100,000 by 2021, while 113,916 in the entire public sector earned the amount.
Declining numbers
Wage categories that have witnessed declining numbers over the past five years are employees earning between Sh20,000 and Sh30,000. The report does not provide the reason.
For instance, workers earning between Sh20,000 and Sh24,999 have reduced from 127,664 in 2017 to 104,198 in 2021, while those earning Sh25,000 to Sh29,999 have gone down from 406,535 to 84,407, a 79 per cent decline.
On the other hand, employees earning between Sh50,000 and Sh99,999 have increased from 1,113,312 to 1,321,404, while those earning at least Sh100,000 have grown by 80.6 per cent from 198,678 to 358,833 over the past five years.
The report’s data excludes unpaid family workers and unpaid directors. It also only focuses on formally employed workers, thus leaving out the informal sector which is estimated to employ upwards of 16 million Kenyans.
