While there’s been a recent 25% increase in the minimum wage for Myanmar garment workers, they are indicating this increase is not enough to cover their continually increasing costs of living. Myanmar’s competitiveness in this industry is significantly impacted by the fact that their workers are much less productive than their counterparts in Thailand, Cambodia, Laos, and other countries. Whether or not the mid to small employers will be able to sustain these increased wages will be heavily dependent upon their workers ability to increase productivity accordingly. Regardless, a continued expectation in productivity will not afford a sustainable means for off-setting increases in cost of living. Thus, to achieve long-term competitiveness in the industry, it’s important the government investigate other means to off-set cost, such as tax reductions and infrastructure improvements.
- They are worried about the increase in minimum wage being too much for businesses.
- When they increase the wages the productivity of workers may not increase to balance it out.
- The wage increase will not likely highly effect large businesses but will greatly effect smaller ones.
“The risk associated with increasing the minimum wage is that it raises wage costs significantly but does not guarantee any increase in productivity. This could result in Myanmar losing the competitive advantage it needs to attract foreign investment in the garment industry.”