Sunday, July 28, 2013

Jobless graduates to earn Sh15,000 monthly if new motion gets nod

Giving young graduates a monthly stipend of Sh15,000 will enable them lead decent lives as they search for jobs.
By Frankline Sunday
KENYA: University graduates who do not find jobs immediately could soon receive Sh15,000 in monthly unemployment benefits for their upkeep.
This is if a motion to cushion the youth from unemployment is passed. The motion seeks to establish a National Unemployment Scheme for graduates similar to the National Social SecurityFund.
The scheme will see one per cent of the country’s annual revenue or at least Sh100 billion set aside for unemployed graduates.
“Aware that thousands of Kenyans graduate annually from universities countrywide and deeply concerned that the unemployment rate continues to rise...this House urges to the Government to create a national unemployment graduates fund at 1 per cent of the annual national Budget,” read the motion in part.
Age bracket
“From this, all unemployed youthful graduates aged 18 to 35 years will be paid a monthly rate of Sh15, 000 until they get employment.”
Data from a recent World Bank report shows that more than 800,000 people get into the job market each year. The huge jobless market competes against 50,000 employment positions in formal employment.
If the proposal is passed, the Treasury will need at least Sh12 billion each month to provide for the unemployment insurance scheme. This sums up to Sh144 billion annually.
While the motion is yet to be debated, economists are already skeptical about its feasibility, given the country’s economic reality.
“The problem with the proposal is that our real unemployment percentage is at 12 per cent of the current workforce which is between 12 and 15 million people,” explains Mr David Owiro, an economist with the Institute of Economic Affairs (IEA).
“If you include the number of disguised unemployment which is at 40 per cent,  it  then becomes impossible to see how Treasury will be able to finance these numbers,” he explains.
The numbers could be much bigger considering that the students graduating at institutions ofhigher education keeps increasing without a corresponding increase in the available job opportunities.
Formal jobs
“There are graduates who complete studies but cannot get formal jobs for several years, so how long can the Government keep on paying unemployment insurance,” states Mr Owiro.
The proposed national employment scheme will be set up under the Ministry of Labour, Social Security and Services. It will be funded solely from the nationalbudget and available to all unemployed graduates.
Unemployment benefits are popular in developed countries like the US, Australia, Canada and theEuropean Union where social welfare payments from the state are made to the unemployed. If implemented, Kenya will be the first country in Africa to provide blanket unemployment benefits to its unemployed population.

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