Job losses due to COVID-19

The coronavirus pandemic has without doubt disrupted the lives of millions and millions of people around the world. As the pandemic continues to put significant pressure on health systems all around the world, drastic measures established to contain its spread are also creating serious impediments to economic activities, consequently affecting millions of livelihoods. While the government’s various measures to curb the spread of the virus, such as limiting movement in places with reported cases; closure of public spaces with high human traffic, such as schools and public events; dusk-to-dawn curfews; and enforcing social distancing were timely, the effects on the livelihoods of Kenyans won’t go unnoticed.

From the first reported case on 13 March 2020 in Kenya, the virus has continued to tear and threaten to bring down to its knees every single sector of the country’s economic state, with many companies being forced to redesign their business models in attempts to continue being profitable, flexible, and cost-efficient. Regrettably, this led to job losses in many sectors.

Many who were employed in the formal sector and were able to afford all the luxurious things in life were hit hard by the job and salary cuts that some could no longer afford meals and daily necessities. So serious was the pandemic that jobs, considered dirty like cleaning streets, unclogging drains were the most sought after, as long as one could get some little money to buy food, pay rent and meet at least the basic necessities.  

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In last year’s report, the Federation of Kenya Employers (FKE) announced that more than 600 companies shed jobs since the onset of the Covid-19 crisis in March 2019, a staggering number that they said was the worst since the economic downturn of the early to mid-1990s when the country was facing massive corruption, insecurity and political instability that resulted in investors fleeing the country.

The Business Daily reported that 604 companies rendered some of their workers redundant and declared the job cuts to the Ministry of Labour in line with the law but the possibility that firms that sent employees home could be more as not all of them complied with the legal requirement.

According to data from the Kenya National Bureau of Statistics (KNBS), about 1.72 million workers lost jobs in three months to June when Kenya imposed coronavirus-induced lockdown. It showed that the number of people in employment fell to 15.87 million between April and the end of June compared to 17.59 million the previous quarter.

Young people were the hardest hit by job cuts compared to their counterparts aged above 35 years. The Quarterly Labour Force Survey released last year indicates that nearly 4.64 million people were jobless at the end of June, up from 2.94 million at the end of March — the month when Kenya reported its first case of Covid-19. This means that 22.61 percent of the 20.5 million labor force, up from 14.3 percent in March, reflecting significant effects of the pandemic on job security.

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Young workers between the ages of 20 and 29 years accounted for 63 percent of the lost jobs or 1,158,466 positions while those between the ages of 35 and the legal retirement age of 50 accounted for 312,316 positions or 17 percent of the lost jobs. This was an indication that companies kept their experienced staff but laid off most of the juniors. The data shows that workers on payroll or business increased from 16.35 million in March 2019 to a peak of 18.1 million in December, but dropped to 17.58 million in March 2020 and 15.87 million in June the same year signaling job cuts experienced that year.

The government however puts the number of unemployed Kenyans at 1,841,918, or 10.4 percent, which is double 961,666 in the quarter ended March. The highest proportion of the unemployed was recorded in the age groups 20-24 and 25-29, each registering over 20 percent according to the KNBS analysts’ report.

Data from World Bank shows that in 2019 Kenya had a labor-force participation rate of 75% but this rate fell to just 56.8% in April 2020 while the KNBS survey shows that the percentage of the population in active employment, whether informal or formal, had fallen to 65.3% of men and 48.8% of women in the same year. The job losses in both the formal and informal sectors can be blamed on COVID-19 pandemic.

The virus continues to disrupt the flow of revenues and limit the supply and demand for goods and services, pushing employers to use different coping mechanisms to stay afloat. Employers have been forced to downsize the workforce, give unpaid leave or make temporary layoffs. As the situation takes a different phase in 2021 following the gradual reopening of the economy, the question arises as to how, or whether Kenya would be prepared to handle the health and financial and economic systems better in the event of similar outbreaks to stop escalation into a full-blown economic and social crisis.

Enock Bett
Digital Media Enthusiast|Tech, Business, Corporate Affairs, Politics, and Governance. [No Modes]
EMAIL: [email protected]
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Enock Bett

Digital Media Enthusiast|Tech, Business, Corporate Affairs, Politics, and Governance. [No Modes] EMAIL: [email protected]

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