Myan­mar sets $2.80 daily min­i­mum wage in bid to boost in­vest­ment

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

Myan­mar has set a min­i­mum wage of 3,600 kyat ($2.80) for an eight-hour work day, a move likely to boost in­vest­ment in the fast-grow­ing coun­try's gar­ment in­dus­try.

The de­ci­sion on a min­i­mum wage, which fol­lows two years of of­ten ac­ri­mo­nious de­bate be­tween gar­ment fac­tory own­ers and la­bor unions, was an­nounced. 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.

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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