Higher minimum wage yielding gains for Myanmar business owners

The change comes after months of negotiations between business owners and workers unions. Before the current wage of K4,800 was agreed upon, businesses had lobbied for the minimum wage to be K4,000, while workers said they needed at least K5,600 to cover their daily living expenses.

Despite the higher costs involved, some businesses see positive changes as a result of the higher wages. Daw Htay Htay, who runs a small local garment factory, said her workers have now become more responsive and responsible at their jobs. The labour-intensive garment industry is among those most heavily affected by the hike in daily minimum wages.

“The workers are now becoming more responsible at work knowing that their wages will be higher,” she said Daw Htay Htay.

U Ngwe Tun, founder of Genius Coffee, a local business employing 80 permanent and 40 seasonal workers, acknowledged that at K3,600 previously, was insufficient for most of his workforce.

“We welcome the increase and will refrain from raising prices and passing them on to our customers,” he said.

The way he tells it, “we had already anticipated the wage hike and prepared for it since last year. Back then, our work processes involved up to 85pc manpower. Since then, we have decreased our reliance on human labour by half,” he said.

Despite the increase, daily minimum wages in Myanmar remains the lowest compared to other countries in Southeast Asia, even falling behind Cambodia, Laos and Vietnam. According to the list of comparative wages in the region released last month by the National Wages and Productivity Commission in Manila, Myanmar’s monthly minimum wages were estimated at only around $80.28 per month, much less than the monthly wage of $110.34 in Laos, $140 in Cambodia and $147.47 in Vietnam.

Myanmar’s new daily minimum wage is now higher than that of Bangladesh, which runs at least 4,000 garment factories.