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Myanmar: New Minimum Wage May Prove Impossible for Factory Owners to Pay

Myanmar’s government imposed a new minimum wage for workers across the country in June, but garment factory owners are fighting what they consider an unfeasible fee and threatening to shut down their facilities if it’s implemented. But workers’ rights organizations in the country aren’t budging about the rate they want.

The low cost country got its first national minimum wage last month and the wage designation committee said garment workers would make 3,600 kyats, roughly $3.14, for an eight-hour day, which would mean a $70 average monthly take-home pay. The increase still leaves Myanmar well ahead as the lowest-cost labor locale. Workers in nearby Vietnam earn roughly $150 per month, and in Thailand, workers bring in $200.

Earlier in the month, garment factory owners from 145 facilities voted unanimously against the set minimum wage citing the challenge they would face in accommodating the rate, according to Global New Light of Myanmar. Nearly 30 factories threatened to shutter in September if in fact the wage takes effect on the first of that month as planned.

Garment factory owners had proposed a rate of 2,500 kyats ($2.18) during wage negotiations between employers and employees in June, but the two sides couldn’t agree. In May, 200 workers went on strike in Yangon, Myanmar’s largest city, demanding a 5,600 kyat ($4.88) daily wage. More workers took to the streets on Sunday seeking a lower 4,000 kyat rate ($3.49).

Union Minister of Labor, Employment and Social Security U Aye Myint said the proposed wage is a suitable one considering conditions in the country and that the law outlining it allows for amendment if it doesn’t work well.

Myanmar’s government said employers should adopt the new wage rate on a trial basis, but the minimum wage body has invited objections and suggestions about the rate for a two-week period and, according to Global New Light, has so far received objections from 162 factory owners and 11 workers in Yangon and from three owners and three workers in Mandalay.