August 19, 2016

Global brands voice support for minimum wage proposal

Workers prepare clothing for export at a garment factory in the Hlinethaya Industrial Zone  of Yangon.—Photo: Aye Min Soe
Workers prepare clothing for export at a garment factory in the Hlinethaya Industrial Zone of Yangon.—Photo: Aye Min Soe

Yangon, 15 July — Dozens of major global brands have thrown their weight behind Myanmar’s proposed minimum wage, calling for guaranteed pay rates as a means of promoting investment in the country’s garment industry and lifting the living standards of its workers.
Both the Ethical Trading Initiative and the Fair Labor Association —  comprising companies  sourcing from, or considering investing in, Myanmar —  expressed their support for the minimum wage in letters to the Union Minister for Labour, Employment and Social Security and the Chair of National Committee on the Minimum Wage.
The Fair Labor Association counts sportswear giant Adidas and outdoor clothing manufacturer Patagonia among its members, while the Ethical Trading Initiative includes international retail heavyweights Tesco, H&M and Gap Inc.
In the letters dated 14 July, both bodies lauded the government for undertaking a transparent mechanism for setting the minimum wage in line with International Labour Organization conventions.
They also raised concerns regarding lobbying by employers for exemptions from the minimum wage for the garment industry.
“Once the minimum wage has been set, companies will be in a position to accommodate that wage in any independent negotiations relating to global supply chains sourcing from Myanmar,” the Fair Labor Association said in its letter.
It stated that “In our view, the suggestion made by trade associations that a higher minimum wage will discourage international investment is based on a false premise.”
Both groups said a minimum wage set through consultations with relevant stakeholders would attract rather than deter international companies.
Myanmar garment factory owners on 2 July unanimously voted against the proposed minimum wage of K3,600 for an eight-hour day.
About 30 factories with foreign investment expressed their intent to shut down if the proposed minimum wage takes effect on 1 September.
The closure of the factories would lead to hundreds of thousands of job losses, according to the garment industry.
The employers cannot agree to the proposed minimum wage because the garment industry does not depend on working hours but rather on productivity, said Daw Khaing Khaing Nwe, secretary of the Myanmar Garment Manufacturers Association, at a 2 July meeting of the garment factory owners.
She suggested the government bear some of the burden by making arrangements for the construction of housing quarters and provision of ferry services for workers, and by giving tax breaks to garment businesses.
The government’s minimum wage body received more than 160 objections from factory owners and 11 from workers in Yangon after the committee issued a notification on the minimum wage proposal on 29 June.
U Maung Maung, the President of the Confederation of Trade Unions
Myanmar and a member of the Governing Body
of the International
Labour Organization, has urged employers in Myanmar to consider the future of the country’s garment industry.   GNLM


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