EUROCHAM MYANMAR GARMENT ADVOCACY GROUP STATEMENT ON MYANMAR’S LEGAL MINIMUM WAGE IN EXPORT-ORIENTED GARMENT SECTOR
In the aftermath of the recent earthquake in Myanmar, which has added to the strain on workers and their families, we believe it is timely and appropriate to reinforce our commitment to meaningful improvements in workers’ livelihoods.
Our ongoing stakeholder engagement, including dialogue with factory-level trade unions and labour organisations, as well as our heightened human rights due diligence and feedback from the MADE in Myanmar programme, consistently identifies low wages as the primary concern for workers.
Myanmar’s legal minimum wage, a key factor in garment sector pricing contracts, has remained unchanged since 2018, falling significantly behind that of comparable countries in the region. In the meantime, inflation has significantly eroded its purchasing power, leaving it worth less than a third of its 2018 value. While the two ‘additional allowances’ of 1,000 MMK per day announced in October 2023 and August 2024 partially mitigated the issue, they fell short of addressing the gap. Furthermore, many factories are not using the adjusted daily wage of 6,800 MMK as the basis for calculating overtime, resulting in significant losses for workers. Increasing the minimum wage would help improve worker retention and support more stable livelihoods, contributing to a healthier and more resilient workforce.
The inadequate minimum wage drives low wages, fueling workplace disputes, high turnover, labour migration, and the loss of specialized skills, which ultimately undermines productivity gains achieved in recent years. A wage structure that forces workers to rely on overtime and ‘attendance bonuses’ to meet basic living needs creates obstacles to the full realization of statutory rights to annual leave and sick leave, negatively impacting workers’ well-being. While most factories have taken steps to ease the burden of rising living costs—such as distributing free rice or cooking oil—these measures remain insufficient. A systemic solution is urgently needed.
The current low minimum wage also presents a significant reputational risk for brands sourcing from Myanmar, translating into a business risk for the country’s export-oriented apparel manufacturers. Many brands have taken measures to individually mitigate wage risks through individual supplier policies, however, we recognize that a sector-wide approach is necessary.
There is a critical need to significantly increase the minimum wage in Myanmar’s export-oriented apparel manufacturing sector to reflect inflation. In the interim, we further commit to ensuring that all our suppliers, at a minimum, calculate overtime payments based on the uplifted amount and adjust contract pricing accordingly.
EuroCham Myanmar Garment Advocacy Group