Burma: unions, global brands & NGOs back minimum wage for all
UPDATE (23 July): The Burmese Government has announced that the minimum wage is confirmed at 3,600 kyats, with universal coverage. Pressure from global brands has been described by unions in Burma as very influential in resisting domestic employer pressure to exempt the garment industry from the minimum wage.
Things are changing in Burma, once a by-word for breaches of ILO core conventions, a no-go country for trade unionists (except for the ones in the military junta’s jails) and home to the poorest people in Asia. The current struggle over the level and coverage of a new minimum wage is a sign of how far Burma has come since a limited democracy was established and trade unions legalised three years ago.
At the end of June, we got the news that Burmese unions had secured a minimum wage of 3,600 kyats a day (US$3.21) from the government. It is only marginally above the wages in Bangladesh, the lowest in the region, and unions had been arguing for 4,000 kyats, but at least the government had rejected the much lower suggestion from local employers of 2,500 kyats. According to the Bangkok Post, in June, around 30 Chinese and 60 South Korean-operated factories said they would shut down operations if the minimum wage proposed by the government-led National Committee for Minimum Wage was approved.
Employers argue that wages need to be set at a level lower than any of Burma’s competitor countries, whereas unions believe that minimum wages should be set at levels that allow workers to live with dignity. The employers’ argument would create a race to the bottom, and massively increase poverty across South and East Asia. Far better to compete on quality and investment – or indeed adopt the same logic as bosses do, and pay higher wages to get the best workers!
However, Burmese employers had a further trick up their sleeves: they demanded that textile workers be exempt from the minimum wage provisions! These workers, mostly women, are manufacturing one of the country’s main exports, and a great source of value for the economy. If the Burmese government accepts their demand, hundreds of thousands of people will be left in extreme poverty.
But now, along with unions and NGOs in Burma and internationally, several global brands have backed the case for a decent minimum wage for all. Multi-stakeholder initiatives like the Ethical Trading Initiative (ETI – which the TUC, ITUC and global manufacturing union IndustriALL all belong to), the Fair Labor Association (FLA) and Business Social Responsibility, have written to the Minister for Labour, Employment and Social Security and to he Chair of the National Committee on the Minimum Wage. The FLA counts sportswear giant Adidas and outdoor clothing manufacturer Patagonia among its members, while the ETI includes international retail heavyweights Tesco, H&M and Gap Inc.
“we wish to counter the claims of Myanmar’s garment manufacturers and employers associations that higher wages will dissuade foreign investors. A minimum wage that has been negotiated by all parties will attract rather than deter international companies from buying garments from Myanmar, particularly companies such as ETI members that have committed to upholding international labour rights standards in their global supply chains.”
And the FLA said:
“Once the minimum wage has been set, companies will be in a position to accommodate that wage in any independent negotiations relating to global supply chains sourcing from Myanmar. In our view, the suggestion made by trade associations that a higher minimum wage will discourage international investment is based on a false premise.”
These corporate initiatives would, like the Burmese minimum wage itself, have been unthinkable just three years ago. They echo similar calls from global brands for a higher minimum wage, negotiated with unions, in Cambodia, and the ground-breaking Bangladesh Fire & Building Safety Accord that unions promoted after the Rana Plaza disaster in 2013, which started this co-operation off.