Labor costs in Myanmar will likely see a 33 percent increase this year, and sourcing costs may rise in line with it.
The country’s National Committee for Minimum Wage has agreed to set the daily salary rate for workers at 4,800 kyat ($3.55). That’s up from the current 3,600 kyat ($2.66) that’s been in place since 2013, and a 33 percent jump. Based on an 8-hour work day, six days a week, garment workers in Myanmar will be earning a minimum wage of $85 a month.
Though the hike may seem sizable percentage-wise, it comes in lower than the 55 percent increase to 5,600 kyat ($4.14 a day, $99 a month) that workers and unions had been demanding in protests.
And unions aren’t happy about it.
“We are not satisfied with committee’s daily wages K4800,” U Ye Naing Win, secretary of the Cooperating Committee of Trade Unions (CCTU) and a former workers’ representative of Central Labour Dispute Arbitration Committee, told the Myanmar Times. “We [workers] are asking for increase in wages since we are starving. They shouldn’t ask for a discount.”
The country’s Labour Union Federation, however, has objected to even raising the wage rate to 4,800 kyat, even though Myanmar’s Minimum Wages Act of 2013 calls for a review of pay rates every two years—which should have happened in 2015 and again in 2017.
For now, unions in Myanmar are imploring the government to consider the actual cost of living when evaluating an appropriate raise, especially in light of impending rental fee increases.
Though the wage panel has set its rate, the committee will take suggestions and objections in the coming weeks and set a final figure based on that commentary within 60 days.
Other low-cost sourcing countries, like Mauritius, Mexico and Cambodia, have been increasing wages rates of late, and labor costs look set to climb this year.