Employers, employees voice objections to proposed minimum wage

January 11, 2018

Some employers and employees are expressing strong opposition to the proposed minimum wage of Ks4,800 announced on 2nd January.

“There were objection reports individually or collectively submitted to the Ministry of Labour, Immigration and Population under the prescribed procedures”, said U Naw Aung, the labour representative of the National Committee on Minimum Wage.

Through respective region and state committees, employers and labourers are allowed to oppose the proposed minimum wage within 60 days after its announcement. The government will make negotiations with the employers and workers who can give logical reasons for their opposition.

The employers said they will face difficulties if the minimum wage goes above Ks4,000. But labourers requested that they can do well only with a minimum wage of Ks5,600.

“A bunch of watercress sells for Ks200-300. Additionally, a viss (1.6 kg) of onions fetches over Ks3,000. We can live a normal life only with minimum wages of Ks5,600 on account of increasing commodity prices.

This rate is only for individual survival, not including family expenditure. Those migrant workers from towns other than Yangon have to spend their money on accommodations and other charges”, said Ma Hla Hla, a member of the labour union of the Hlainethaya Industrial Zone.

Disapproval letters can be submitted to the respective committees by 16th January, bearing the signatures of the workers. They also request that a minimum wage of Ks5,600 should also have impact on enterprises with more than five workers instead of those businesses with ten.

“Despite 60-days due date, we received directives that disagreement letters have to be sent within two weeks. This is another question which comes out”, said Ma Hla Hla.

U Aye Thaung, chairman of Shwelinpan Industrial Park, said that this set rate cannot affect all sectors but employers engaged in garment enterprises using the Cutting, Making and Packaging (CMP) system will be faced with difficulties. Factories making branded products will not matter even if they have to offer more than the set rate. Employers as well as employees have their own difficulties.

The government called on feedback from the employers regarding business operation in industrial zones. There is still no response received from them, said U Aye Thaung.

“Some employers are not strongly disapproving of the proposed minimum wage, but they want the government to tackle problems of high transportation, insufficient electric supply, delays in working with the cabinets, and tax imposition”, he continued.

“If minimum labour wages are set at a high rate, it will slow the country’s economy, making the foreign investors hesitate over investment. If the rate is too low, it will force local workers to migrate to foreign countries and this will also hurt the country’s economy. The government needs to handle this carefully while endeavouring to improve the ease of doing business ranking that is observed by the World Bank. A moderate rate needs to be set”, said U Win Zaw, a member of the National Committee on Minimum Wage.

U Thein Swe, Union Minister for Labour, Immigration and Population, said at a recent regular meeting between Vice President 1 and businessmen that this proposed rate is decided on commodity price, exchange rate, Gross Domestic Product and inflation, along with wages set in neighbouring countries. They listened to the employers and employees from regions and states.

“We do not want to hurt any of them due to this proposed rate”, he said.

“We want the businessmen to do well and have the labourers in a happy work environment”, said he added.

Daw Khine Khine Nwe, the joint general secretary of Union of Myanmar Federation of Chambers of Commerce and Industry reported that SMEs play a vital role in driving Myanmar’s economy. Most of the SMEs do not earn foreign currency. The current prevailing exchange rate increases by 12 per cent against 2015’s FX. Meanwhile, the minimum wages is up by 33 per cent compared to that of 2015. If minimum wages exceed Ks4,000, it might triggers changes in labor force and work environment.

Previously, opposition and objection between employers and employees came out when a minimum wage of Ks3,600 was set. The government explained the economic climate of the country and they finally accepted the set rate.

“We hope the government will handle it well this time”, said some members of National Committee on Minimum Wage.

After this proposed minimum wage is approved, workers will be paid at the set rate. New, inexperienced workers during a three-month training period (before the probation period) will be paid not less than 50 per cent of minimum wages. Those labourers during the three-month probation period will receive 75 per cent of minimum wages.

By May Thet Hnin

Ref; The Global New Light of Myanmar