Sharp Daily
No Result
View All Result
Saturday, January 3, 2026
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home Investments

The great decoupling: myth or reality in Kenya?

Hezron Mwangi by Hezron Mwangi
January 8, 2025
in Investments, Money
Reading Time: 2 mins read

In economic discussions, the concept of the Great Decoupling highlights the supposed gap between labor productivity and wage growth. While much of the discourse focuses on developed economies like the United States, it raises pertinent questions for Kenya. Has labor productivity in Kenya outpaced wage growth, or is this phenomenon irrelevant to the local context?

Traditional economic theory suggests that wage growth aligns with increases in labor productivity, as a worker’s pay is determined by their marginal productivity. However, critics argue that in many economies, productivity gains increasingly benefit capital rather than labor. In Kenya, the narrative of stagnant wages amidst rising productivity is often invoked, but is this based on a clear understanding of the data?

Several explanations have been offered globally for the Great Decoupling, including declining union influence and increased deregulation, but these may not fully apply to Kenya. Trade unions in Kenya, though challenged by structural changes in the economy, continue to play a significant role in negotiating for workers’ rights. However, the informal sector, which employs over 80.0% of the labor force, complicates wage dynamics. Here, productivity gains are often unmeasured, and wages are determined more by market forces than marginal productivity.

Another factor is the nature of worker compensation. While wage increases may appear stagnant, nonwage benefits such as healthcare, pensions, and social security contributions often go unaccounted for. In Kenya, the expansion of private insurance and pension schemes suggests that compensation may be growing in forms other than direct wages, mirroring trends observed in other countries.

RELATEDPOSTS

Is the Highest Yield All That Matters When Choosing a Money Market Fund?

January 2, 2026

Why the Sectional Properties Act Is Reshaping Apartment Ownership in Kenya

January 2, 2026

Also, how we measure inflation and deflate wages can distort perceptions. Using Consumer Price Indices (CPI) to deflate wages might indicate stagnation, but if broader indices such as the GDP deflator were applied, a different picture might emerge. For Kenya, understanding real productivity and compensation growth requires a more accurate measurement framework.

While the Great Decoupling offers a compelling narrative, it may not fully reflect Kenya’s economic realities. Instead of focusing on wage stagnation, policymakers should aim to improve productivity in the informal sector, enhance compensation mechanisms, and ensure accurate economic measurements. Only then can we assess whether Kenya truly faces a decoupling or a different set of challenges altogether.

Previous Post

How networking can open doors to financial opportunities

Next Post

High court warns IG Kanja: Attend or face jail time

Hezron Mwangi

Hezron Mwangi

Related Posts

Money

New year saving resolutions that actually work for Kenyans

January 2, 2026
Business

Bitcoin ATMs appear in kenyan malls, triggering regulatory alarm

December 30, 2025
Economy

Diageo, Vodafone exit and the quiet unravelling of Britain’s corporate hold on Kenya

December 30, 2025
Analysis

Investors to buy and sell NSE shares on M-Pesa from January 2026

December 29, 2025
Analysis

Why Some Investors Are Paying to Lose: The Rise of Tax-Driven Investing

December 23, 2025
Analysis

EABL corporate bond issuance

December 23, 2025

LATEST STORIES

Is the Highest Yield All That Matters When Choosing a Money Market Fund?

January 2, 2026

Why the Sectional Properties Act Is Reshaping Apartment Ownership in Kenya

January 2, 2026

Tall building collapses in south c Nairobi, rescue Efforts ongoing

January 2, 2026

How Debt is Devouring Kenya’s Future

January 2, 2026

Why You Should Avoid Early Withdrawals from Your Pension

January 2, 2026

Entering the new year with reflection, intention, and financial clarity

January 2, 2026

Building resilient retirement portfolios through asset diversification

January 2, 2026

Innovative financing options for Kenya’s mega projects

January 2, 2026
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024