PHNOM PENH, Cambodia — The daily minimum wage instated nationwide by Myanmar’s government has led to some unforeseen negative consequences toward workers in the country’s apparel industry, according to a workers’ rights organization.
Implemented last September, the minimum wage was set at 3,600 Myanmar kyat a day, or about $2.70. This amount adds up to about $65 a month for a six-day week, and was hailed as a step forward in formalizing the country’s economy. For its fledgling garment sector, which was revived after Myanmar opened up around 2011 bringing in $1.56 billion by 2014, the amount is one of the lowest in the region, compared to neighboring Vietnam and Cambodia. While factory owners protested then that the amount was too high and even threatened factory closures, the wage implementation provided a salve to workers who had been holding demonstrations on wages and working conditions.
A report published by research and advocacy organization Progressive Voices showed that there have been some negative consequences. Titled “Raising the Bottom,” the report came from interviews conducted among 199 workers in 62 factories earlier this year, and the study’s questions ranged from concerns about working conditions and hours to trade union disputes and settlements.
While 99 percent of workers reported that their employers were following the minimum wage implementation, 61 percent of them say that there have actually been negative impacts from the policy.
“The negative impact of the minimum wage comes in the form of a reduction of benefits and bonuses, such as provision of transport to the workplace or punctuality bonuses; an increase in pressure on productivity, including higher targets, and stricter enforcement of rules and regulations, such as toilet breaks and lunch time,” the report said.
An example of the rising pressure on productivity includes seamstresses saying that their target number of items increased from 50 pieces an hour to 80. One factory worker interviewed in the port city of Pathein, four hours west of Yangon, said that if workers made a mistake in their sewing, they were fined.
“In fact, to me, I feel like there is no positive change at all after the minimum wage policy,” he said, according to the report.
Another problem that cropped up for workers was that some manufacturers attempted to pay long-term workers — who are highly skilled and have moved up in the factory in terms of salary scale — the minimum amount.
“Some workers actually had their basic pay reduced as factories adjusted and took away certain pay grades from skilled workers,” the report said. “Thus, in practical terms, the minimum wage amount…is widely used as maximum pay.”
For example, skilled workers in one factory in Indagaw Industrial Zone used to get roughly $18 a day. Now it has been reduced to about $3.80 a day, an employee told the researchers.
Another problem is the abuse of a loophole in the minimum wage law that states that employers can hire workers on a probation period of three months, paying them $2.05 a day, before moving them to the legally mandated rate of $2.70 a day.
“Some factory owners are exploiting these provisions,” the report said. “For some workers, this applies to when they first start the job, but there were also cases of workers being fired and rehired after the policy was implemented, only to start at a lower wage.”
Other problems revealed by the report include the fact that factory management “actively discourage” workers from taking days off by fining them as a punishment, maternity leave being unavailable to 27 percent of interviewees despite it being a legal requirement, and 22 percent being afraid of joining a trade union due to the fear of being laid off.
The Myanmar Garment Manufacturers Association could not be reached for comment.