Garment Industry Rejects Minimum Wage Proposal

By Yen Saning 3 July 2015

RANGOON — Garment manufacturers in Rangoon announced that they will push back against a minimum wage proposed by the Burmese government, claiming they cannot afford to pay laborers the 3,600 kyats (US$3.24) per eight-hour day recommended by an expert committee.

More than 150 members of the Myanmar Garment Manufacturers Association (MGMA) convened on Thursday to discuss the proposal, which was announced earlier this week by Burma’s National Minimum Wage Committee.

Following two years of research and analysis, the committee settled on the number based on recommendations by both unions and employers against escalating commodity prices in Burma’s emerging market.

Once approved, the wage would apply to all sectors with the exception of small and family-owned businesses employing less than 15 people.

The committee’s memo, published in state media, invited individuals and organizations to submit appeals and recommendations within two weeks, after which a stakeholder meeting will be held before a wage is officially enacted.

The MGMA members, a mix of mostly South Korean, Chinese and a handful of Burmese factory owners told reporters that they plan to formally oppose the proposal and submit an alternative offer of 2,500 kyats per day for all those working in the cutting, measuring and packaging (CMP) industry.

Khaing Khaing Nwe, the secretary of MGMA, said employers in CMP would agree to gradually increasing the wage to 3,600 kyats over the coming years if manufacturers find that they can support the raise.

“As we get paid for the job when it’s done,” she said, “we can’t afford to raise the price of the product. We depend on our orders.”

Manufacturing associations representing Chinese and South Korean factories—which are members of the MGMA but spoke on behalf of their national associates—warned that they would shut down operations in September if the proposed wage were implemented.

Representatives said that about 30 Chinese and 60 Korean factories employing some 200,000 workers would be affected by the wage and would likely cease working in Burma due to the costs.

Burma’s budding garment industry has presented the loudest opposition to the proposed minimum wage, which is higher than that of neighboring Bangladesh, but still one of the lowest in the region.

Minimum wages vary by region in Vietnam and China, but both float above $100 per month across sectors in most regions. In Cambodia, which also has an enormous garment manufacturing industry, the minimum wage is set at $128 plus bonuses and overtime, leaving the average garment worker with a salary of $183 to $200 per month, according to the International Labour Organization (ILO).

Trade representatives in Burma have lobbied for quick implementation of the country’s minimum wage, warning dissenting voices in the garment sector that they risk slowing down the process for millions of other employees. Aung Lin, chairman of the Myanmar Trade Union Federation (MTUF), said the wage needs to be implemented immediately to avoid predatory investment in all sectors.

“Foreign investors will look out for their own interests, they will not prioritize the development of our people’s human resources,” he said. “We cannot say that a situation whereby people from this country are barely surviving, nearly starving, is good enough. We have to think about upgrading it.”

Additional reporting contributed by Thit Nay Moe.