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Minimum Wage Levels in ASEAN

Updated:2018-9-4 12:02:30    Source:www.tannet-group.comViews:692

Minimum wage rates in ASEAN countries are rising gradually to match the region’s increased cost of living and boost domestic demand. Several nations which are popular among foreign investors for their cheap labor are facing pressures due to poverty and low economic growth. Despite the increase, Myanmar remains the lowest compared to the minimum wages of other countries in Southeast Asia, while Philippines remains the highest. The latest statutory minimum wage levels in each of the ASEAN states are listed below.

In Cambodia, the minimum wage standards exist mainly for the garment and footwear manufacturing industry in the country. In 2018, the government further revised the minimum monthly wage of workers in the industry by 11%. From January 1, 2018, the new wage for garment workers in the country is USD170 per month.

Indonesia’s labor market contains significant regional variation because wages are set at a provincial level by Governors through Wage Councils and District Wage Councils of the archipelago’s 34 provinces. The minimum wage in Jakarta, at Rp 3,648,035 is almost 2.5 times greater than in Yogyakarta, the province with the lowest minimum wage at Rp 1,454,154. In smaller cities, the minimum wages are usually even lower.

Recently, the Laotian government increased the minimum wage for all businesses and factories in the country from 900,000 kip to 1.1 million kip a month, starting May 1, 2018. The higher minimum wage is beneficial for not just laborers in the country, but also businesses as it attracts the interest of laborers who may otherwise seek work in neighboring countries that have higher minimum wages.

Malaysia is yet to announce its latest minimum wage rate; the new rate is estimated to rise to RM1,500 a month in 2018. Currently, the minimum monthly wage for workers in Sabah and Sarawak is between RM800 and RM920, while for Peninsular Malaysia it is RM1,000.

Earlier this year, the government of Myanmar formally raised the country’s daily minimum wage by 33% to 4800 Kyat. As per the government notification, the new wage is uniform across the nation, irrespective of the work type. But this does not apply to small businesses that employ 10 people or fewer.

Despite the increase, Myanmar remains the lowest compared to the minimum wages of other countries in Southeast Asia, even falling behind Cambodia, Laos, and Vietnam.

The Philippines has daily minimum wage rates that vary from region to region, ranging from P256 to P512 a day. The wages are set by tripartite regional wage boards located in every region. The country’s average minimum wage rate is among the highest in ASEAN, as compared to its competitors Indonesia, and Vietnam.

In Thailand, the nationwide daily minimum wage has been raised for the first time in three years as the country’s military government attempts to do away with a lingering income disparity. In April, the wage committee announced new wage rate, between 308 baht to 330 baht, varying from province to province; the average daily minimum wage rate in the country is 315.97 baht.

This year, the Vietnamese government has increased minimum wages to combat inflation. As a result, the average monthly minimum wage in the country increased from VND2,580,000 in 2017 to VND3,370,000 in 2018. The rising wages could weigh on the country’s competitiveness as the neighboring nations such as Laos and Myanmar have lower minimum wages.

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