Sharp Daily
No Result
View All Result
Wednesday, November 26, 2025
  • 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

Kenya Feels the Impact After the U.S. Cancels Key Transport Funding Deal

November 26, 2025

November 26, 2025

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

World bank raises Kenya’s 2025 growth forecast as construction sector rebounds

November 25, 2025
Analysis

Cytonn money market fund

November 24, 2025
Analysis

Growing Appeal of Alternative Investments in Africa

November 21, 2025
Economy

Inside Kenya’s 2025 maandamano

November 21, 2025
Kenya's first Bitcoin ATM at Two Rivers Mall
Investments

Kenya says no crypto firms are licensed as bitcoin ATMs appear across Nairobi malls

November 21, 2025
Economy

M-Shwari vs money market funds

November 20, 2025

LATEST STORIES

Kenya Feels the Impact After the U.S. Cancels Key Transport Funding Deal

November 26, 2025

November 26, 2025

The psychology of spending vs saving

November 26, 2025
Tanzania's President Samia Suluhu Hassan attends her swearing-in ceremony in Dodoma, Tanzania November 3, 2025. © Tanzania Presidential Press Unit via Reuters

Human rights groups petition ICC over Tanzania alleged post-election killings

November 26, 2025

How Interest Rate Hikes Shape Small-Business Investment

November 25, 2025

Kenya’s Retirement Benefits Schemes H1’2025 Performance

November 25, 2025

Understanding midlife crisis

November 25, 2025
KPLC rolls out new OCR meter-reading technology

KPLC rolls out new OCR meter-reading technology to eliminate manual data entry

November 25, 2025
  • 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