Quick-to-market clothier H&M has been backing Myanmar’s transition to a viable sourcing country, and though it welcomed the nation’s recent moves to establish a minimum wage, the retailer said it is concerned about actual implementation of the new rate.
Myanmar’s government imposed a new nation-wide minimum wage in June that will see garment workers earning 3,600 kyats, roughly $2.92. Garment factory owners, however, have been fighting the indicated increase saying it would cripple the sector and some facilities would certainly face closure. The factory owners were seeking a lesser wage increase of 2,500 kyats ($2.03).
H&M said in a statement that it is concerned that the minimum wage hasn’t yet been implemented though Myanmar’s government enacted the Minimum Wage Law two years back. The company is also worried that the minimum wage level’s ultimate implementation may be done in a way that isn’t beneficial to the industry.
“In setting a minimum wage level, we advise that the government set a uniform level across all industries,” H&M said. “If the garment industry wage levels are lower than other industries, it will not be able to attract and retain a skilled labor force, which it needs to develop and grow into a thriving economic driver.”
The retailer stressed the need for freedom of association, which it said should lead to dialogue between employers and worker representatives to get issues settled constructively, and to allow for the right to organize and collective bargaining to continue.
“When violence is used by public or private sector security forces to curtail workers’ peaceful protests, this is likely to be more of a deterrent to companies considering sourcing from Myanmar than the strikes themselves, and will have a significant negative impact on Myanmar’s reputation,” H&M noted, adding that if worker representatives are detained or dismissed for striking, that doesn’t bode well for Myanmar’s reputation either—and investors will take note.
Myanmar’s minimum wage, according to H&M, should be reconsidered through an annual review mechanism that allows for key stakeholders to weigh in and provides a foundation for a tripartite industrial relations and transparent wage level negotiations process.
H&M said it is encouraging the Minimum Wage Law’s urgent, and uniform, implementation.