Employers Oppose Immediate Salary Increase Calls After Fuel Price Surge

The Federation of Kenya Employers (FKE) has come out strongly against proposals to immediately raise workers’ salaries following the recent increase in fuel prices.

The employers’ body is instead urging a more structured and carefully planned approach to wage discussions, warning that sudden salary adjustments could create deeper economic problems.

The debate has intensified after the Central Organisation of Trade Unions (COTU) renewed its call for an urgent review of the minimum wage.

The union argues that many workers are currently under severe financial pressure as the cost of living continues to rise, especially after fuel price adjustments that have pushed up transport and basic commodity costs across the country.

Workers Push for Higher Wages Amid Rising Living Costs

Speaking on Thursday, April 16, Francis Atwoli, the Secretary General of COTU, said workers—particularly those in the public sector—should push for salary increases to match the growing inflation.

He emphasized that negotiations are already ongoing and expressed expectations that the government may consider an upward adjustment of the minimum wage by May 1, 2026.

According to the union, many Kenyan workers are struggling to cope with rising expenses, including transport, food, rent, and utilities. COTU maintains that without wage increases, purchasing power will continue to decline, leaving employees worse off despite being formally employed.

Employers Warn of Economic Strain on Businesses

On the other side of the debate, the Federation of Kenya Employers (Federation of Kenya Employers) has warned that increasing salaries without considering the wider economic situation could backfire.

The employers argue that businesses are already under pressure due to high operational costs, with fuel prices being one of the biggest contributors.

FKE Executive Director Jacqueline Mugo noted that forcing salary increments could lead businesses to pass the extra costs onto consumers.

This, she explained, would ultimately drive up prices of goods and services, worsening the very cost-of-living challenges the wage increase is meant to solve.

She added that while workers’ concerns are valid, wage adjustments must be discussed in a structured and balanced way that ensures economic stability. According to her, unplanned increases could hurt business sustainability and reduce job creation opportunities.

Call for Balanced Dialogue Between Workers and Employers

Employers are now calling for a broader national conversation that includes government, labour unions, and the private sector. They want any decision on wages to consider productivity levels, inflation trends, and the survival of small and medium-sized enterprises (SMEs), which play a major role in Kenya’s economy.

FKE insists that sustainable wage growth should go hand in hand with economic growth rather than being implemented as a reaction to short-term shocks such as fuel price hikes.

Concerns Over Shifting Employment Trends

This debate comes at a time when reports suggest that many Kenyans are increasingly moving away from formal employment. A growing number are reportedly turning to informal work, freelancing, and self-employment as traditional job opportunities shrink.

Recent data indicates that employment levels have dropped by about 12 percent, with notable reductions in hiring across key sectors such as manufacturing, retail, hospitality, transport, and financial services.

Analysts warn that if economic pressures continue, more workers could shift away from formal jobs, further reshaping Kenya’s labour market.

Overall, both employers and workers agree on one thing: the rising cost of living is a serious challenge. However, they remain divided on the best and most sustainable way to address it.

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