Minimum Wages in Kenya Mabel Andalón - Index of - IZA

general order regime, non-compliance was higher in municipalities other than Nairobi
and Mombassa (Table 8).
The ILFS data allows identifying the percentage of workers whose earnings are at the
minimum wage level. This percentage is usually identified with the term ―Fraction‖.
Only a small fraction of salaried workers received monthly wages equal to the statutory
minimum. If fraction is measured as all workers whose earnings are within a range of
plus/minus two percent of the statutory minimum wage, it is found that only 0.3 percent
of the workers in agricultural activities, and 2.1 percent of workers in urban areas had
earnings within that range (see Table 4, column identified as fraction at +/-2 %) Even
when this interval is increased to plus/minus 5 percent of the minimum wage, the share of
workers whose earnings fall in that range is not very large: 6.8 percent for agricultural
and 2.9 for urban workers. The fraction at the minimum wage is higher for men, less
educated and young workers.
The number of workers whose wage and employment status are potentially influenced by
the minimum wage increases somewhat if we adopt as a measure of the importance of the
minimum wage the fraction affected, that is the proportion of workers whose wages are
just above the 1998 minimum wage, but below the wage set the following year in May
1 st , 1999. 7 These workers could have potentially lost their jobs after the following update
if the wage in 1998/99 reflected their productivity. According to this measure, 8.1 percent
of the workers in agriculture and 5.1 in general order were at risk of being affected by the
minimum wage increase. This percentage is higher for women, less educated and younger
workers.
The ratio of the minimum to the average wage is a widely used measure to assess the
toughness of the minimum wage. This measure is often called the Kaitz ratio. Another
often reported measure is the ratio of the minimum wage relative to the median wage in
the economy. Measures referred to the median wage are more appropriated in countries
with high earnings inequality or in instances where the minimum wage could be affecting
7 When reporting fraction affected, wages are expressed in constant prices of October 1997.
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