The government should get more involved in supporting infrastructure, facilitating loans for replacing and upgrading machines, providing skills training and reducing red tape in the garment sector. But most importantly, it should help the industry raise the minimum wage, he said
The Minimum Wage Law was enacted on March 22, 2013 and the Minimum Wages Rules were issued on July 12 in the same year. But it was only on September 1, 2015 that the minimum wage ruling came into force, setting the wage at K3,600 per day for eight hours of work, or K450 per hour.
The two years between the passing of the law and its enforcement saw contentious debate between employers and workers’ associations on a reasonable minimum wage, mediated by the National Minimum Wage Committee.
Higher wages
With employees demanding a wage of K4,500 per day and employer willing to pay only K2,500 per day, a deal for the minimum wage of K3,600 per day was struck in 2015.
Since then, factory workers have been demanding a raise in the minimum wage to K5,600 per day, and experts estimate employers might settle between K4,000 and K4,800 by next year.
The new minimum wage will be discussed at a multi-stakeholder forum with the government, employers, employee and civil society groups soon. This will be followed by thet National Minimum Wage Committee meeting in December to discuss the result of stakeholder forum. This will be submitted to the government and parliament for consideration and subsequently announced to the public.
Within the next 60 days of the public announcement, employer or employee can make a case to adjust the new rate, said U Zaw Aye Maung, Yangon Region labouir minister. “As such, the new rate can be only enacted in March 2018 at the earliest,” he added.
Need for productivity
However, if approved, the new minimum wage will not be sustainable for the industry if it is to be profitable, U Khin Maung Aye, chairman of Lat War Group of Companies said.
“After the minimum wage was raised in 2015, we could not pay a bonus. We have to adjust the wages according to our profits. We will pay more if we can have more profit. Without having better profits it is hard for us to raise the rate,” he said.
To raise profits, “we have to welcome more clothing and apparel brands to set up shop in this country. If they can pay the minimum wage or more than minimum wage it is a good sign that more investments from garment manufacturers will arrive,” he said.
U Myint Soe said garment factory owners will not be able to stay in business if the minimum wage is raised once more. To overcome the higher costs, manufacturers must start investing in improving productivity now, he said.
By: Su Phyo Win, Myanmar Times
Published on: 09 October 2017