WWD: Myanmar's Apparel Industry Grapples With New Minimum Wage

October 27, 2015

By Dene-Hern Chen

YANGON, Myanmar — Just a month after the government enacted its first minimum wage, Myanmar’s emergent apparel sector is exhibiting the growing pains of an industry seeking to formalize.

Before the daily minimum wage of 3,600 kyat — roughly $2.80 at the current exchange rate — was implemented on Sept. 1, thousands of workers rallied for a higher salary at factories around Yangon’s industrial zones. According to the Myanmar Garment Manufacturers Association, monthly wages for sewing operators ranged from $40 to $60, and the government’s decision on 3,600 kyat a day would total roughly $67 a month for a six-day week. This fell short of what unions were demanding, while manufacturers argued that it would lead to mass closures and firings.

In Myanmar, the garment sector has been growing exponentially since the lifting of European Union sanctions in 2013 and the gradual easing of U.S. embargoes. Garment exports to the EU during the first quarter more than doubled from the same period last year, reaching more than $92 million in value, while shipments to the U.S., although still modest, increased more than 112 percent to about $6.3 million.

Along with ever-increasing exports to China, South Korea and Japan, MGMA is optimistically forecasting exports to reach $2 billion by the end of the year.

Factory owners across the region argue that an increasing minimum wage will see investors and factories flee to another country in search of cheaper labor.

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