The low wages in Myanmar’s troubled garment sector are only one indicator of how badly the political upheaval and violence have affected individuals’s lives. Overseas garment manufacturers and factories nonetheless in-country ought to think about staff’ views that they keep however improve wages.
For the reason that 2021 coup, working circumstances and labour rights protections in Myanmar’s garment sector have eroded considerably, with some calling for multinational corporations to divest. The garment trade has resisted these calls for, claiming that it offers wanted employment. The EU – the most important marketplace for Myanmar clothes – argues that supporting livelihoods and first rate work in Myanmar is important. Nevertheless, with the minimal wage down at the least 43 per cent in actual phrases since 2018, there are rising doubts about whether or not garment work in Myanmar continues to be “first rate”. This erosion shouldn’t be solely hurting staff, however undermining the trade and elevating questions on manufacturers’ buying practices.
Throughout the 2010s, Myanmar’s garment sector skilled main progress, bolstered by a whole lot of latest investments, improved labour rights, and a revitalised commerce union motion. A whole bunch of hundreds of individuals – largely ladies – moved from rural Myanmar to Yangon for garment jobs due to higher pay and longer, extra constant employment phrases. Earlier than the COVID-19 pandemic, wages have been round 200,000 MMK/month (about US$151 on the time), not together with variable pay. Whereas not excessive, these wages offered first rate incomes, permitting about 60 per cent of staff to ship cash to their households.
For the reason that coup, nevertheless, labour rights violations have elevated and wages and dealing circumstances have worsened. Many commerce union leaders have been pressured to flee the nation. The Worldwide Labour Group (ILO) discovered that Myanmar’s far-reaching restrictions on unions have been a elementary violation of its worldwide obligations. The authorized minimal wage, as of August 2024, is successfully 6,800 kyat per day (US$1.11 at market charges). This features a day by day base wage (final up to date in 2018) of 4,800 kyat (MMK), plus two further 1,000 kyat day by day allowances, introduced in 2023 and 2024. If the minimal wage had stored up with inflation since its final adjustment in 2018, it will now be about 12,000 MMK/day.
Actual wages have additionally fallen dramatically. Information from H&M – one of many few manufacturers offering clear information – reveals that wages (together with assured pay however excluding variable gadgets like extra time and bonuses) elevated from 199,000 MMK/month (US$140 on the time) in 2020 to 248,000 MMK/month (US$72 at market charges on the time) at end-2023, a rise of 25 per cent. Over this identical interval, the CPI elevated an estimated 88 per cent and the price of a typical weight loss plan, in line with the Worldwide Meals Coverage Analysis Institute (IFPRI), elevated 160 per cent. The result’s that an H&M wage, which in 2020 was greater than sufficient to feed a median household, might not achieve this by end-2023. Whereas some factories elevated wages by 20-30 per cent in 2024 in response to post-conscription employee shortages, this has not offset years of declining actual wages.
Nevertheless, it isn’t clear how such an exit is accountable if everybody leaves. It is usually not clear that Myanmar’s staff help this.
There are a number of causes behind the decline in wages. The principle offender is excessive inflation, pushed by the navy regime’s cash printing and widespread mistrust of the kyat. Factories additionally face an more and more inefficient and difficult enterprise setting. Electrical energy provide has deteriorated: Yangon’s industrial zones now common 20 hours of blackouts per day. Virtually all factories personal a generator, from which they get about 62 per cent of their energy – at important further price. Logistics is extra sophisticated and costly, with land routes to China and Thailand closely disrupted resulting from preventing. Employees have additionally been leaving extra steadily because the conscription legislation was introduced in February 2024.
The depreciation of the kyat has partly offset rising challenges, as factories promote in international forex however have essentially the most prices in kyat. Even with a posh foreign exchange regime manipulated by the navy regime, factories nonetheless get greater than twice as many kyats per greenback as they did pre-coup. If factories took the identical variety of US {dollars} they paid for wages in 2020 – about US$140/month, in line with H&M, and gave staff the kyat acquired from exchanging that immediately, they’d recover from 400,000 kyat/month. As a substitute, H&M’s information reveals that in US greenback phrases, wages have been down from $140 in 2020 to simply $94 a month in 2023.
Altering buying practices from manufacturers additionally play a job in declining wages. Because the operational and reputational dangers of sourcing from Myanmar have grown, value has develop into a extra essential driver of sourcing selections. The decline of long-term sourcing relationships has affected factories, forcing them to be extra value aggressive. Some manufacturers are spending extra on in-country compliance groups, additional lowering Myanmar’s competitiveness.
Determine 1. Precise wages, adjusted wages, and meals prices in Myanmar since 2020
Lagging wages bolster unions’ arguments concerning the ills of Myanmar’s garment sector. Unions have been important in highlighting deteriorating wages, working circumstances and labour rights. Nevertheless, a few of their different arguments, together with that the sector is a lifeline for the regime, are extra suspect. A better share of foreign exchange coming into Myanmar for clothes finally ends up going in direction of staff’ wages than for nearly some other export, and the best way the regime advantages – via pressured conversion – shouldn’t be the fault of the trade or the employees, each of which undergo from it. Nonetheless, unions form perceptions about shopping for clothes which might be made in Myanmar, elevating dangers for these manufacturers nonetheless sourcing from Myanmar.
Eroding wages add to the controversy about whether or not garment manufacturers in Myanmar ought to “keep or go”. Quite a few manufacturers, corresponding to Inditex, have introduced a “accountable exit” from Myanmar. Nevertheless, it isn’t clear how such an exit is accountable if everybody leaves. It is usually not clear that Myanmar’s staff help this. A survey by Labor Options of over 100,000 staff discovered that their key issues have been job safety and the flexibility to proceed supporting their households. Briefly, staff need manufacturers to “keep and pay”. The onus is on Myanmar’s garment trade, particularly the manufacturers, to work collectively to make sure staff are paid extra. If this doesn’t occur, it not solely hurts staff but in addition undermines the trade’s future and makes manufacturers’ claims about accountable sourcing look empty.
2024/257
