YANGON — Myanmar’s garment manufacturers have signaled their opposition to a proposed national minimum wage of just over $3 per day, saying the increase could force factories in the vital industry to close.
“With that wage, businesses cannot survive,” said Khine Khine Nwe, secretary general of the Myanmar Garment Manufacturers Association, which represents 280 factories employing around 200,000 workers.
Khine Khine Nwe, secretary-general of the Myanmar Garment Manufacturers Association, speaks at a media briefing in Yangon on March 24. (Photo by Simon Roughneen)
The apparel industry’s resistance to the proposed minimum wage drew a sharp rebuke from local labor groups, as well as the International Trade Union Confederation. “The new minimum wage will still leave workers and their dependents just above the global severe poverty line of $1.25 per person, and many will still struggle to make ends meet,” said ITUC General Secretary Sharan Burrow.
The garment manufacturers’ group met July 2, following a June 29 announcement by Myanmar’s National Minimum Wage Committee proposing a daily wage floor of 3,600 kyat ($3.24), or 450 kyat per hour, for an eight-hour day.
The committee is composed of government officials, business people and worker representatives. The announcement comes after more than two years Myanmar’s parliament passed a minimum wage law in March 2013. The delay was partly due to a decision by the Ministry of Labor to carry out a survey of workers’ living standards and household size, which only began in January.
Khine Khine Nwe, who employs nearly 400 workers at Best Industrial Company, a garment maker in Yangon, told the Nikkei Asian Review that Myanmar’s garment factories mainly sell to overseas buyers and do not have a local market. “Wages should be tied to prices, and the price is not in our hands. We get whatever the buyers are willing to pay,” she said.
Garments and textiles are Myanmar’s main manufacturing industry. There are more than 300 clothing factories in the country, mostly in Yangon. With the lifting of most U.S. sanctions and the inclusion of Myanmar in the European Union’s Generalized System of Preferences — which grants duty- and quota-free access to the European market — the country’s long-battered manufacturing sector is reviving. The garment sector is best placed among Myanmar’s manufacturing industries to capitalize amid fierce competition from low-wage rivals.
The garment manufacturers claim the proposed minimum wage will give an advantage to regional rivals. “The new minimum wage will make Myanmar’s garment factories uncompetitive with neighboring countries, in particular Cambodia, Vietnam and Bangladesh,” the association said in a statement July 3.
Although Myanmar’s economy is forecast to grow by up to 8% next year, after attracting record foreign investment of $8 billion during the 2014-15 financial year, the International Monetary Fund last week warned the economy could overheat as imports rise and the kyat depreciates against the dollar, increasing costs for businesses.
Source: Nikkei Asian Review