Effect of Inflation on Minimum Wages in Kenya
Journal Title: Journal of Social Economics - Year 2017, Vol 4, Issue 1
Abstract
The history of minimum wages in Kenya dates back to 1932. Minimum wages have been increasing at a rate lower than the rate of inflation, yet inflation is one of the parameters to be considered while fixing minimum wages. However, the Wage Guidelines (2005), the Labour Institution Act (2007) and the International Labour Organization Minimum Wages Fixing Convention No 131 of 1970 all require minimum wages to be aligned to inflation. The study estimated the effect of inflation on minimum wages using the random effect model based on panel data for the period 1990-2014. The findings show that inflation affects changes in minimum wages positively. The government should work towards pursuing policies that align increase in minimum wages to inflation.
Authors and Affiliations
Peter Dayan
Keywords
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