Kenyans Earning 100,000 shillings and above

How 83% of Kenya's Workforce Powers the Informal Economy While High-Earners Flourish

In Kenya, a nation of over 50 million people, two starkly different economic stories unfold. One story is that of a growing class of high-earning professionals enjoying the benefits of Kenya’s formal economy. The other story reveals the reality of millions of Kenyans working in the informal sector, where job stability, benefits, and upward mobility are scarce. Together, these tales form Kenya's economic paradox in 2023—a tale of resilience, inequality, and the struggle for inclusive growth.

A Tale of Growth at the Top

In Kenya's formal sector, high earners—those earning over KES 100,000 per month—have increased from 271,446 in 2018 to 374,894 in 2022, reflecting a 38% growth over the 5 year period. This contrasts sharply with the many earning significantly less in the informal sector.

The Middle Ground: Kenya’s Emerging Middle ClassKenya's emerging middle class occupies the space between the informal workforce and high earners. In the formal sector, 42% earn under KES 50,000, while only about 12% earn above KES 100,000. This group is vital for driving consumption and economic stability, yet many struggle to ascend the income ladder.

The Income Ladder: Navigating Kenya’s Economic Divide

Kenya’s income distribution resembles a pyramid: 42% of formal employees earn below KES 50,000, while a small, growing segment earns above KES 100,000. This structure underscores the challenges of upward mobility, particularly for informal workers.

Key Insights and Economic Implications

Kenya's employment data reveal two paths for growth: the rise of high earners signals diversification, while the large informal sector highlights the need for quality formal jobs. An emerging middle class could drive economic growth, but barriers to mobility persist.

Looking Ahead: Bridging the Gap Between Two EconomiesThe contrasting employment landscape requires strategies to bridge the gap between formal and informal sectors. Key challenges include expanding formal job opportunities, supporting informal workers with training and financial services, and fostering an inclusive economic model.

As we watch Kenya’s economic story unfold, one central question remains:

Can Kenya harness the dynamism of its informal economy while expanding formal employment opportunities?

The answer will shape Kenya’s economic future and determine whether its two economies can unite into a single, inclusive force for progress.