Myanmar sets new daily minimum wage at US$3.60 per hour

“We decided on K4800 as the new minimum wage, which has been agreed to by most committee members,” said U Thein Swe, minister of Labour, Immigration and Population.

The new wage, however, will not affect enterprises that employ 10 people or fewer, he said.

The old minimum wage of K3600 was set in September 2015.  The National Committee for the Minimum Wage first proposed the new minimum wage on January 2, and both workers and businessmen rejected the proposal at subsequent consultations.

Employers warned that a K4800 basic wage will force small- and medium-sized industries, which comprised the bulk of businesses in the country, to close.

The workers on the other hand said that K4800 would not be enough to sustain families amid steadily rising prices for basic commodities. They want the minimum wage to be at least K5600.

Minister U Thein Swe said the government will try to resolve the concerns of both workers and businessman.

“We will deal with them as much as we can to ease the tension over the new wage,” he said.

U Naw Aung, the labour representative on the committee, told The Myanmar Times the new minimum wage did not totally address the needs of workers.

“The wage is a medium rate and is not the correct one for workers,” he said.

Despite the increase, Myanmar remains the lowest compared to the minimum wages of 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, the Philippines and 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.

U Khin Maung Aye, owner of Lat War Garments Factory, expressed grave concern about the new minimum wage.

“Garment production lines are very expensive. We can’t afford to pay higher a minimum wage while we cannot make enough profits,” he said.

U Khin Maung Aye said employers are reluctant to raise salaries since it would escalate other costs such as overtime pay, usage of electricity, and others.

“The workers need to work harder,” he said.  “If we increase productivity, we can afford to pay the new minimum wage,” said U Khin Maung Aye.

U Myint Soe, chair of the Myanmar Garments Manufacturers Association (MGMA), said the government should improve the infrastructure, facilitate loans for the upgrade of machines, reduce red tape and provide training for workers in order to increase productivity, particularly in the garment sector.

“It should help the industry to cope with the increase of the minimum wage,” he said.

U Tun Tun Naing, associate secretary of the Cooperating Committee of Trade Unions, said the government should create comfortable workplaces and sustainable living conditions for daily wage workers amid the slowing down of the economy.

“If it could not control the rise in prices of basic commodities, even if they fix the minimum wage at K5600, this would not be enough for the workers,” he said.

Ma Than Than, a garment factory worker, agrees with U Tun Tun Naing.

“I think we could save a little more if we get K4800 and the cost of living does not rise,” she said. “But if the prices of basic commodities increase, the new minimum wage will not make any difference for us.”