YANGON – Garment workers in Myanmar are unlikely to benefit from recent minimum wage increases as factories have upped production targets to compensate. New research has now called on apparel brands and retailers that source products from Myanmar to take into account the revised minimum wage rate in their cost calculations, enabling suppliers to pay workers at least the new legal minimum wage. Researchers have also called for a minimum floor wage in Asia for garment workers.
In May this year, the legal minimum wage in Myanmar was raised from 3,600 kyat (US$2.30) a day to 4,800 kyat (US$3.00) a day. The Centre for Research on Multinational Corporations (SOMO) and Action Labor Rights claim the increase has had the unintended consequence of leading to higher production targets, meaning workers will have to work harder or even longer (unpaid) hours.
Say the researchers: “Taking into account inflation rates, increasing costs of living and cut production bonuses, workers may not earn a penny more than before the 2018 minimum wage was introduced.
”Garment brands and retailers that source products from Myanmar must take into account the revised minimum wage rate in their cost calculations, enabling their suppliers to pay workers at least the new legal minimum wage.”
The researchers also point to evidence from several factories which supply to leading western brands where hourly production targets have been increased in response to the latest minimum wage rise. Some factories have also attempted to justify dismissals on the back of the latest wage increase.
In addition to corporate action, SOMO suggests a systemic and sustainable way to address wage issues is to call for a regional floor wage, as that would effectively “stop the garment industry’s wage race to the bottom.” Add the researchers: “The Asia Floor Wage Campaign, for instance, proposes the implementation of the regional Asia Floor Wage. This wage is of course different in each country’s national currency, but has the power to buy the same set of goods and services in all countries.”