Kenyan Workers Mark Labour Day Amid Shrinking Pay and Economic Strain
As Kenya joins the rest of the world in marking Labour Day, workers across the country are grappling with the harsh economic realities of job losses, inflation, and reduced take-home pay. The celebration, traditionally a time to honour the workforce, is being overshadowed by a growing sense of financial insecurity.
Recent government policy changes have significantly impacted workers’ net salaries. Higher deductions under the National Social Security Fund (NSSF) scheme have seen workers earning Sh36,000 and above take home less pay, with those earning Sh72,000 and above experiencing more than double the deductions compared to last year. For instance, an employee earning Sh50,000 now nets Sh39,029 — over Sh500 less than they did in January. Workers earning Sh100,000 are losing Sh1,512 more from each paycheck.
These deductions affect more than two million workers across the country.
Meanwhile, the cost of living continues to rise. Inflation climbed to 4.1% in April 2025, up from 2.72% in October 2024, driven largely by food and energy costs. A 2023 wage report showed a real wage decline of 4.1%, underscoring the deteriorating purchasing power of the average Kenyan worker.
Businesses have not been spared either. A Central Bank of Kenya survey revealed that almost 50% of firms laid off casual workers in 2024, with another 31% reducing their contract staff. Permanent jobs, particularly in non-bank sectors, have also seen significant cuts.
Despite the financial pressures on workers, the government has reported a surge in revenue collection. Since implementing the new NSSF structure in 2023, Sh220 billion has been collected. PAYE tax income has risen from Sh495 billion to Sh555 billion, partly due to increased taxation on high-income earners. The introduction of a 1.5% housing levy has brought in an additional Sh86 billion as of December 2024.
While these figures reflect a positive outlook for national coffers, many workers feel left behind. Their frustration is growing as they are forced to make tough spending decisions, scale back on non-essential items, and adopt a more frugal lifestyle.
As the country celebrates Labour Day, the contrast between rising government revenue and falling household incomes paints a sobering picture of the Kenyan worker’s reality in 2025.
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Kenyan Workers Mark Labour Day Amid Shrinking Pay and Economic Strain