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Why Magoha's nation of plumbers would be a miserable one

Monday July 29 2019

By KWAME OWINO
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Keeping a keen eye on the public sector is important because government is the largest single spender in Kenya. State officers have very effective platforms and their preferences affect public conversations. The ideas that they express, whether as conjecture or as their experiences often informs public reasoning about economic and public affairs.

My colleagues and I reviewed this video clip in which the Cabinet Secretary for Education Prof Magoha explains one theory of unemployment in Kenya. During this event, the Cabinet Secretary expresses the frustration that exists in Kenya, owing to the dearth of jobs for people at all levels of education. He cites an incident where he could not find a plumber to undertake repairs that he needed in his residence in Yala town in the west of Kenya. Mentioning that he had to travel several kilometres to Kisumu town to get a plumber, he attributes the absence of plumbers in Yala town to an inappropriate education system that favours acquisition of degree and to the low esteem in which plumbers are held by the population.

The Cabinet Secretary is understandably frustrated that a plumber cannot be found within his neighbourhood. He reiterates the common narrative in Kenya that educational institutions, and the universities in particular, are “failing” society by providing degrees that do not lead to jobs. In his view, it is therefore “stupid” to continue to provide education for people who will not find employment from that training when these people could have been plumbers.

The anecdote is correct, but the economics reasoning contained in Prof Magoha’s conclusions are wrong. To start with, I am unsure whether the he is aware that only 9.8 percent of all dwellings in Kenya have water piped into the main household. What this means is that a house with piped water in it is a very small slice of all the 12 million households in Kenya. Even worse, only one in a thousand of the households in Siaya county have in-house plumbing. Therefore, plumbers looking for jobs are smart enough not to situate their businesses around Yala town because they would remain unemployed, like those graduates that the CS thought were not too bright.

INCORRECT ASSOCIATIONS

This situation points to the fact that in-house plumbing services is still a service demanded by such a small part of the population that the scarcity of plumbers shouldn’t be a pointer to whether the education system is working well or not. These errors of attribution of unemployment to university education will not end for as long as policy makers make incorrect associations like these.

The ratio of Kenyans with indoor plumbing may be low but another 21 percent have piped water into the main yard and this may be the demand that should support the need for more plumbers. It is not evident that Kenya really has an acute shortage of plumbers for a number of reasons. If plumbing were such a rare skill, I would expect the wages of the village plumber to be much higher than a common profession as agriculture or motorcycle transportation. It is not evident from basic employment data that the plumber earns much more than people in the substitute jobs mentioned.

However, if the data doesn’t tell the right story, then I would expect plumbers to raise their wages from the services they provide to the small number of clients and supplement this by teaching apprentices. This is not evident from the roll of courses taught by many colleges except for the village polytechnics. Because I am sure that plumbers wouldn’t be leaving money on the table, that they do not do this suggests that there isn’t much money to be made here.

UNSUCCESSFUL POLICY

The combination of a small number of potential clients, absence of higher wages and the costs of apprenticeship all point towards the fact that plumbing is not such a high paying job, precisely because the demand is limited to urban areas. Put more simply, plumbing skills are not scarce and the market does not pay a premium for that reason. The nudge towards training of more plumbers by itself will not be a successful policy.

Adam Smith, that famous Scottish scholar of political economy provided an apposite explanation for the creation and distribution of employment. His summary is contained in Book 1, chapter three of his most famous publication under the title: That The Division of Labour is Determined by the Extent of the Market. In essence, for a country that has only 30 percent of the population with piped water in the home or as a shared facility in the yard, there is hardly enough demand for plumbers who provide those services in urban areas while only a foolish plumber would situate the business in Siaya. Let's get the water first and thereby provide a reason for villagers in Yala Town to find use for plumbers.

Kwame Owino is the chief executive officer of the Institute of Economic Affairs (IEA-Kenya), a public policy think tank based in Nairobi.

Twitter: @IEAKwame