Myanmar’s union government has increased the country’s daily minimum wage for an eight-hour work day from Kyat 3,600 (US$2.65) to Kyat 4,800 (US$3.54). The revised wage, which came into effect from 14 May will apply to all businesses with 10 or more employees irrespective of the location or type of work.
Myanmar’s National Committee for Designating Minimum Wages first proposed the pay rise on January 2, 2018 but had to postpone formal announcement to allow a nationwide public debate between employers, workers and representatives of the union government. Workers’ organizations had initially stated that the rise is too low in the face of rising living costs in the country while employers had complained that the wage increase will raise their operating costs and will affect the country’s labor-intensive export-oriented industries such as garment manufacturing and food processing. While workers’ representatives demanded an increase to Kyat 5,600 (US$4.13), employers requested that the minimum wage be fixed at Kyat 4,000 (US$2.95).
The wage increase is the first since Myanmar introduced a minimum wage in 2015 as part of the government’s labor market reforms. While Myanmar has not yet ratified the International Labour Organisation’s (ILO’s) Minimum Wage Convention 131, the country’s Minimum Wage Law is believed to meet most of its requirements. Most significantly, the minimum wage is set through tripartite social discussions between employers’ associations, workers’ organizations and government representatives. Although Myanmar has one of the lowest wages in the region, the ILO has stated that the introduction of the minimum wage in Myanmar is producing some positive results in terms of reducing poverty and inequality.
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