Economic Dimensions of Inequalities in East Africa

Median wages in East Africa

The median monthly wage in East Africa ranges from a high of $176 in Rwanda to $84 in Tanzania with Uganda ($102) and Kenya ($94) falling in between . A comparable survey was not available for Burundi. Insights from each country are provided below, with a focus on highlighting the difference in wages earned by type of contract, gender age and educational attainment.

Table 3. Median hourly and monthly wages in East Africa

Country

Median hourly wage

(local currency)

Median monthly wage

(local currency)

Median Wage

(monthly, US$)[i]

Rwanda

450.0

 108,000

175.90

Uganda

 1,121.0

 269,040

 101.80

Kenya

 33.7

 8,081

 94.40

Tanzania

 550.0

 132,000

 83.80

Source: Wageindicators.org and authors’ calculations. Exchange rates: www.oanda.com

Kenyaxvi

The survey shows that 58 per cent of workers were paid on or above the minimum while 42 per cent were paid below the minimum monthly wage of $94. However, only 35 per cent of the informal workers are paid above the minimum wage, compared to 85 per cent of the formal workers. Women are more often paid above the minimum wage than men (64 per cent versus 55 per cent).

Workers aged 50 years and older are more often paid above the minimum wage than workers aged 29 or younger (71 per cent versus 47 per cent).

Workers without a contract are most likely to be paid under the minimum wage rates, and employees with a permanent contract are most often paid above the minimum wage (40 per cent versus 78 per cent).

More than 20 per cent of workers participate in a health insurance scheme and almost 20 per cent are in a pension scheme.

With almost 64 hours the average working week is much longer than the standard 52 hours, and 4 hours longer than Rwanda, Tanzania and Uganda who average a 60-hour working week.

Rwandaxvii

Only 49 per cent of the sample is paid on or above the poverty line of 118,000 RWF ($192) per month, implying that more than half of Rwanda’s workers are paid below the country’s national poverty line (see text box in the following page).

Just 10 per cent of workers without contracts earn on or above the poverty line compared to 79 per cent of employees with permanent contracts.

Men are more likely to be paid above the poverty line than women (52 per cent versus 47 per cent) and older workers are more likely to be paid above the poverty line compared to younger workers.

The vast majority of workers with tertiary education (92 per cent) are paid on or above the poverty line compared to just 15 per cent of workers without formal education.

‘Trade Unions Push For Over Time Pay, Minimum Wage’ May 2, 2013

Rwanda’s biggest Trade Union, the Central Trade Union of Workers of Rwanda (CESTRAR) making demands on behalf of employees including raising the minimum wage, paying for over time and paying salaries that commensurate with market prices. In a statement released in line with the International Labour Day marked yesterday, CESTRAR argued that their demand is based on the increasing market prices or cost of living especially in Kigali.

Trade Unions CESTRAR and the Labour Congress and the Brotherhood-Rwanda want the government to set the daily minimum wage for casual labourers at village level at Rwf 1,500 (US$ 2.44) and Rwf 2,000 (US$ 3.25) for those living in the City of Kigali.

The current minimum wage of Rwf100 (US$ 0.16) was set in 1974 and Trade Unions say government should come out strongly to protect its labour force from what they term as exploitation. They cited casual labourers such as tea pluckers said to be earning Rwf300 (US$ 0.49) a day. Others are in the construction industry and factories that are also said to be earning as low as Rwf 10,000 (US$ 16.29) a month.

But Anna Mugabo, the Director General in charge of labour and employment in the Ministry of Public Service and Labour said the ministry is gathering ideas on minimum wage. “All Rwandans as beneficiaries will have a say on it, and the ministry will make sure that it is fair and reflects the lifestyle as envisaged under the IDPRS 2,” she said [on May 1, 2013].

Source: Trade Unions Push for Over Time Pay, Minimum Wage By Jean De La Croix Tabaro, 2 May 2013 (The New Times of Rwanda via http://allafrica.com/stories/201305020100.html)

Tanzaniaxviii

The survey results showed that 64 per cent of the sample was paid on or above the minimum wage and 36 per cent was paid below the minimum wage threshold. Workers in very small and, surprisingly, in very large firms are more often paid under the minimum wage threshold of $84 per month.

The more years of work experience and the older the age, the higher the percentage paid above the minimum wage threshold. Hardly any gender differences can be noticed.

Text Box 1. It Pays Well To Work In East Africa’s Public Sector

It pays (well) to work in the public sector. In Tanzania, civil servants earn 3.4 times more than private sector workers. They have seen their real (inflation-adjusted) wages rise by 32 per cent between 2008 and 2011. Contrast this with private sector workers whose real wages declined by 10 per cent during the same period.xix In Uganda, 92 per cent of public sector workers earn a wage above the poverty line, compared to the average of 77 per cent of ordinary Ugandan workers.

Workers without a contract and those with no formal education are most likely to be paid below the minimum wage.

Ugandaxx

The survey showed that 77 per cent of the sample was paid on or above the poverty line of UGX 403 per hour (or US$ 1.25 per day), whereas 23 per cent was paid below the poverty line.

Only 62 per cent of informal workers are paid above the poverty line compared to 97 per cent of the most formal workers. Only 55 per cent of workers without a contract are paid a wage above the poverty line.

Women are slightly less likely than men to be paid above the poverty line (75 per cent versus 78 per cent). For workers under 30 years of age, 71 per cent are paid on or above the poverty line, compared to 87 per cent of workers who are more than 50 years old.

Two thirds (66 per cent) of workers with primary or lower secondary education are paid on or above the poverty line, compared to 97 per cent of workers who completed tertiary education.

Public sector workers are the best off with 92 per cent of them earning a wage above the poverty line.

——-

xvBased on exchange rates as at December 31, 2012 obtained on www.oanda.com xvihttp://www.wageindicator.org/documents/publicationslist/publications-2012/1207-WageIndicator_report_face-to-face_surveys_Kenia_20120602-KT.pdf xviihttp://www.wageindicator.org/documents/publicationslist/publications-2013/AIAS_WI_countryreports_f2f_report_Rwanda_final_20130321.pdf

xviiihttp://www.wageindicator.org/documents/publicationslist/publications-2012/1206-WageIndicator_report_face-to-face_surveys_Tanzania_20120522.pdf xixWorld Bank (June 2013) “Tanzania Lets Think Together xxhttp://www.wageindicator.org/main/publications/2012/wages-in-uganda-wage-indicator-survey-2012

Pages: 1 2 3 4 5 6