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Why manufacturers are against hike of minimum wage

Martin Mwita @PeopleDailyKe

Industries and companies operating in Kenya could end up closing shop if there is continued increase in the minimum wage, manufacturers have warned ahead of today’s Labour day celebrations.

Through their lobby group, Kenya Association of Manufacturers(KAM), the industrialists have said if the latter continues to escalate, which adds to their cost of operations, businesses would have to make drastic decisions in order to stay afloat.

This includes reducing the number of jobs in order to meet their overhead costs and relocating their major operations to cheaper labour markets – in the process exporting local jobs.

“A pronouncement to increase the minimum wage will be a huge blow to industry and will negatively impact the livelihood of workers,” KAM said in a statement. During last year’s Labour Day celebrations, President Uhuru Kenyatta increased the minimum wage by 18 per cent.

KAM has, however, argued that the industry has yet to pick up pace from last year’s setbacks, which include a severe drought, high inflation rates and the economic slowdown due to prolonged electioneering.

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