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Economy

Myanmar to raise minimum wage by 33%

Compromise draws dissent from both labor and management

Labor-intensive industries in Myanmar such as seafood processing face increased costs from a higher minimum wage.   © Reuters

YANGON -- Myanmar will raise its minimum wage by one-third to 4,800 kyat ($3.63) per day, a move that will affect the country's labor-intensive exporting industries like garment manufacturing and food processing.

A panel of representatives from the government, labor and management proposed the wage hike in early January. During the 60-day public debate period, the committee received a total of 4,092 objections from management and labor alike but decided to submit the plan for cabinet approval at a meeting Monday.

The Ministry of Labor, Immigration and Population said the new wage will take effect once the cabinet approves it, but there is no specific timeline.

This will be Myanmar's first increase since it introduced a minimum wage in September 2015. Labor representatives pushed for 5,600 kyat per day, while managers requested 4,000 kyat.

The Myanmar Garment Manufacturers Association told Nikkei that countermeasures, such as reducing compensation for overtime, are necessary to survive under the new wage level. The association also asked for government support in areas like financing for new infrastructure and machinery to reduce nonlabor costs.

Garment manufacturing is a mainstay export industry for Myanmar. More apparel makers from advanced economies are turning to the country for manual labor like cloth cutting and sewing. Orders from the U.S. and Europe have been growing under de facto leader Aung San Suu Kyi.

Some fear that the wage hike, coming amid global condemnation of Myanmar's treatment of its Rohingya minority, could be a major blow to the export sectors.

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