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 The decision on a minimum wage, which follows two years of often
acrimonious debate between garment factory owners and labor unions,
was announced on Saturday.
Myanmar's government has targeted garments for rapid growth, and
Saturday's statement may help spur this, as it gives clarity on the
law and labor costs to global apparel brands buying clothes from
Myanmar.
Companies that have pushed for creation of a minimum wage include
giant Swedish retailer Hennes & Mauritz <HMb.ST>, which works with
13 factories in Myanmar, and U.S. retailer Gap Inc <GPS.N>, which
buys from two.
Once a thriving industry, Myanmar's garment sector was hit hard by
sanctions imposed by the United States, stripped of trade benefits
and abandoned by brands who feared the reputational risk associated
with the former junta.
In a bid to change this, Myanmar lawmakers passed a minimum wage law
in 2013, but negotiations between employers, trade unions and the
government were delayed by garment workers' strikes and threats from
garment factory owners - many from China and South Korea - to close
if the minimum wage was set too high.
COMPETITIVE ADVANTAGE
Under the newly-established level, Myanmar's minimum monthly pay
would be around $67 a month, based on a six-day work week, giving it
a competitive advantage over thriving garment makers such as Vietnam
and Cambodia where the monthly minimum wage ranges from $90 to $128,
according to the International Labor Organization.
Myanmar's announcement only stated the wage-rule for a "standard
eight-hour work day". It did not mention overtime compensation.
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Saturday's statement comes less than three months before Myanmar's
first free elections in 25 years. Nobel laureate Aung San Suu Kyi's
National League for Democracy is widely expected to comfortably win
the poll.
The approved wage would apply to workers across all sectors, but
exclude small and family-run businesses that employ fewer than 15
people, National Minimum Wage Committee, a forum comprising all
negotiating parties, said in state-run Myanma Ahlin newspaper.
The wage will come into effect on Sept. 1.
Myanmar exported $1.5 billion of clothes and materials in 2014, up
from $1.2 billion the previous year and $947 million in 2012,
according to the Global Trade Atlas.
The World Bank has projected that Myanmar's economy will expand
about 8 percent in the current fiscal year.
(Reporting by Timothy Mclaughlin and Aung Hla Tun; Editing by
Richard Borsuk)
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