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New Frontiers in the Global Race to the Bottom

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Myanmar-Cigar-Factory

Labor in Bangladesh is not cheap enough for the apparel industry. Time to move to Myanmar, so long as the government–a group of military leaders not precisely known for taking the poor into consideration–doesn’t raise the minimum wage to a shockingly high 40 cents an hour.

In the last few years, top Western clothing retailers such as Gap, H&M, Marks and Spencer Group PLC and Primark Stores Ltd. have signed contracts with more than a dozen garment factories in Myanmar, the former British colony also known as Burma. The country emerged from decades of military dictatorship in 2011 and major U.S. and European sanctions shortly thereafter. It now offers some of the cheapest labor costs on the planet combined with easy access to Asian markets — both attractive features for corporations looking to source low-cost, ready-made garments for export.

Last summer, Gap raised eyebrows when it became the first American apparel company to publicly sign a contract in Myanmar since President Barack Obama eased sanctions. At the time, Gap said, “The apparel industry will play a key role in helping to fuel the economic prosperity of the country.”

But if garment-factory bosses get their way, comparatively little of that newfound wealth will flow to workers.

The Myanmar Garment Manufacturers Association, representing about 350 factories, says the government’s proposed wage is too high and will force employers out of business. It wants its own industry-specific rate of about $2 a day instead. Starting pay in factories currently hovers around $1 a day.

An association official recalled a meeting two weeks ago that brought together representatives of about 160 factories, including the owners of plants that supply Gap and H&M, to discuss the government’s wage proposal. “At one point, we did a roll call vote to see a show of hands, who would say basically they couldn’t afford to pay it, and every hand went up,” says the group’s project manager Jacob Clere, reached on the phone in Yangon, the nation’s largest city and garment-manufacturing hub. “In terms of the membership, they’re all saying they can’t afford to pay it.”

That sentiment contrasts sharply with the repeated public assurances of brands that say they are committed to improving labor standards in Myanmar.

What I love about how the garment industry is framing this is by saying that the apparel contractors can’t pay this minimum wage. Not letting them off the hook here, but the real issue is that Gap, Walmart, Primark, etc., won’t pay enough per garment to allow them to pay that higher wage. Again, let’s be clear where most of the power resides in the global apparel industry–with the big western companies doing the contracting. The garment owners may often be awful people who treat employees with unnecessary cruelty. But they are most certainly operating with very thin profit margins thanks to the cost standards imposed upon them by the western companies. They are the ones that need to be held culpable. This is why we need international standards on wages, conditions, and other facts of work in the global garment trade, precisely so that a nation like Myanmar can pay their workers 40 cents an hour without the garment companies having all the leverage to defeat it.

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