The Impact of Globalization on the Kenya Labor Market

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While Kenya was definitely one of the leaders in the race towards globalization in Africa, their progression forward was plagued with stops and starts that put them at a disadvantage. It was actually not until 1993 that Kenya fully integrated itself into the global market1. As Africa gained full independence from its colonial masters, “the global trading system remained highly inefficient, with advanced economies drawing on their technological edge to enjoy tremendous market powers: monopoly or oligopoly on the supply side, and monopsony or oligopsony on the demand side (Blue Hippo).” Due to the inefficiency of the system it was even more difficult for Kenya to gain ground in the global economy and thus their economy became impaired which in turn negatively impacted the evolution of their labor market.

Globalization

To fully understand the impact of globalization on the Kenya labor market, it is crucial to illustrate what globalization is. According to the International Monetary Fund (IMF), globalization is “is the integration of economies throughout the world through trade, financial flows, the exchange of technology and information, and the movement of people (IMF).” This increased in integration and interdependence has created a complex link between the world economies which has in in turn increased each member’s reliance on the global economy. This has greatly improved the investment portfolios of business and individuals alike. With the new cross-border opportunities countries are continuing to see larger and larger amounts of their GDP coming from international trade2.

Historical View of Kenyan Economy

Once Kenya gained its independence from Britain in 1963 its economy began to bloom during the period of 1964-1980. At...

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...“allowed trade unions to seek full compensation for price increases without hindrance through wage guidelines (essay).” Due to the aforementioned there was an increase in real wages in the private and public sector.

Following the institution of the 1990s trade reforms it was obvious that competition had increased and the current employment levels were too high. Following the laws had to be amended which would give employers the power to terminate employees easier. This occurred as a result of firms saying that it was necessary that they have the power to “restructure their operations in response to economic adjustment taking place in the country (Essay).” It was a system quite similar to employment at will in the United States. Instead of notifying the minister to labor when they terminate an employee, they only have to notify the district or regional labor office.

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