Business

Minimum Wage Gathers Support From Abroad

By Nobel Zaw 17 July 2015

RANGOON — International labor groups and multinational companies this week urged the government and recalcitrant garment manufacturers in Burma to accept a daily minimum wage of 3,600 kyats (US$3.20), a proposal put forward by the National Minimum Wage Committee late last month.

The US-based Fair Labor Association (FLA), a coalition of labor rights groups around the world and 17 affiliated companies, including global apparel provider Adidas Group and shoe manufacturer New Balance, sent a letter to the Ministry of Labor this week urging garment factory owners in Burma to drop their demand that the industry be exempted from the pay regulation.

The statement advised the Ministry of Labor not to heed warnings made by trade associations that a minimum wage for Burma’s garment workers of 3,600 kyats would discourage international investment, and that rather “brands committed to paying living wages in their supply chain would be encouraged to source from Myanmar, rather than deterred.”

“Our concern is that any exemption negotiated for the garment industry would lead to hundreds of thousands of garment workers not having a wage that meets their basic needs,” the letter reads.
Another organization promoting labor rights internationally, the Ethical Trading Initiative, added its voice to those supporting the nationwide application of the minimum wage on Wednesday.

The grouping of more than 80 international firms including H&M and Gap Inc. warned that exempting the country’s garment manufacturers from a baseline wage requirement could lead to employee strikes and industrial unrest, which the initiative said were “conditions that are far more likely to see international brands reconsider their investment in Myanmar than payment of a national minimum wage.”

“We urge Myanmar’s government to take a firm stance to help improve conditions—it is vital to ensure that the first ever minimum wage level doesn’t lock workers from one sector into poverty,” ETI Director Peter McAllister was quoted as saying.

ETI said some of its members were currently sourcing from Burma or considering investment in the country and as such, want to see growth in the garment sector underpinned by a living wage for its workers.

Myo Myo Aye, an advisor for the Myanmar Trade Union Federation (MTUF), told The Irrawaddy that the absence of a reasonable minimum wage at present was the source of the frequent work stoppages in Rangoon that have made headlines in recent years.

She said garment manufacturers were unlikely to cut and run if the minimum wage is approved, but acknowledged that low-skilled labor would be most vulnerable to any employee cuts that might be justified by the added labor costs for firms.

“The owner will not close their industry very easily when the minimum wage is approved, but the owner will assess the work that is worth 3,600 kyats, so unskilled laborers could face losing their jobs,” Myo Myo Aye said.

The Myanmar Garment Manufacturers Association could not be reached for comment on Friday.

Burma’s National Minimum Wage Committee proposed the 3,600 kyats minimum wage for an eight-hour day on June 30. Organizations and individuals were encouraged to submit feedback within two weeks of that date.

With the window for feedback closed, state- and division-level minimum wage committee members have been instructed to review the public input and submit it to the national committee within 30 days.

The national wage committee is then tasked with discussing the proposal with government, industry, labor unions and other stakeholders to reach a final decision on what to set the wage at within 60 days.

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