Despite strong economic growth in Lower Mekong economies, workers in many of the countries continue to earn comparatively low wages. As of October 2018, the minimum monthly wage in Myanmar was 144,000 kyat (about US$91 per month).1 The figure for Laos was the equivalent of US$130 per month2 and for Vietnam US$118–171, depending on location.3 The highest minimum wages are in Thailand – the equivalent of US$278–298 per month. In some cases there have been significant wage rises: the minimum wage for Cambodia’s garment workers has more than doubled in 6 years, from US$80 per month in 20134 to US$182 from 1 January 2019.5
Share of the employment sector
Agriculture is still the largest employer in most Lower Mekong countries, with Thailand having the lowest percentage at 32.28% of the total labor force.6 The share of the agricultural sector has fallen by 20% in the past two decades in Vietnam and Thailand, which have seen steady advances by the service sector.7 Tourism is a growing source of employment in Cambodia: it directly provided 9.7 percent of all jobs in 2012,8 rising to 13.6 percent in 2017.9 The sector is forecast to directly account for 17.8% of total employment by 2028.10
Source: Asian Development Bank and International Labor Organization estimates based on official sources. Created by ODI, April 2016. Licensed under CC BY-SA 4.0.
Informal labor dominates in most countries. Around 74 percent of the workforce in Myanmar can be classified as informal,11 as can those in Cambodia and Laos. Informal labor includes work in very small family enterprises and is typically not covered by labor regulations such as the minimum wage.
The Lower Mekong countries have varying mechanisms for establishing a minimum wage, with several opting to set regional rates associated with variances in cost of living.
Cambodia’s 1997 Labor Law authorizes the Ministry of Labor and Vocational Training to set national minimum wages, and the Ministry relies on recommendations from a tripartite panel that includes government, employers associations and labor unions.12The minimum wage so far applies only to the garment and shoe sector. The ILO has noted that “…on average, the base rate of pay makes up only around 65% of Cambodian garment workers’ take-home pay, suggesting that elements of pay other than the minimum wage itself are quite significant.”13
In the public sector, minimum monthly wages set for 2017 for Cambodian civil servants are 853,500 riel (about $213); for police, 937,977 riel (about $234) including a rice package; for the military, 880,977 riel (about $220), excluding a rice package; for teachers and doctors, 953,500 riel (about $238) (excluding a teacher bonus for teaching in remote areas).14
Laos’ general minimum wage (state employees are dealt with separately) is set by the Ministry of Labor and Social Welfare. It was raised to 900,000 kips (about US$110) per month, from 1 April 201515 and was lifted to Kip 1,100,000 (around US$130) from 1 May 2018.16
Thailand set a national minimum wage in 2013 of 300 Thai baht (about USD$8.64) per day.17 The cabinet decision to declare a nationwide rate was a departure from the earlier practice of regional rates and provided a major windfall to poorer parts of the country. A difference between provinces was partly reintroduced on 1 January 2017.18 New minimum daily wage rates from 308–330 baht (varying from province to province) became effective from 1 April 2018.19
Vietnam, like Thailand, has used a method for determining minimum wage that applies varying rates associated with a location’s cost of living. The highest wages are in urban Hanoi and Ho Chi Minh City. In 2018, minimum monthly wages were lifted by 6.5 percent, to a range of VND 2.76–3.98 million (US$118–171).20
Myanmar’s parliament passed a Minimum Wage Law in March 2013, and in September 2015 set the minimum wage at K3600. This was increased to 4,800 kyats per 8-hour working day from 14 May 2018.21
Source: International Labour Organization. Labour force by sex and age (ILO estimates and projections). Created by ODI, April 2016. Licensed under CC BY-SA 4.0.
Women often receive lower wages than men. An International Labour Organization report on 32 developing countries released in 2016 showed an earnings gap between young Cambodian women and men of 35%, fourth-highest of the 23 countries surveyed for that measure. Vietnam, the only other Lower Mekong country surveyed, had an overall wage gap of 15%.22 Women and men have near parity in Thailand where women earned 1.4% less for similar work.23
Historical differentials in minimum wage and gender parity, as well as general employment opportunities, contribute to the ‘pull factors’ encouraging labor migration within the region.
Thailand evolved from a country of origin of migrant laborers to a key destination for labor. It has the 14th largest number of immigrants of all countries, at 4.5 million people. Its neighbor Myanmar is 20th in the world for the number of emigrants at 3.1 m.24 Myanmar-Thailand is the 16th largest migration corridor in the world. An estimated 1.9–3 million Myanmar migrants live and work in Thailand, a large proportion of whom are unregistered.25 Vietnam is 25th globally for emigrants, with 2.6 m, and the 11th highest remittance receiving country, getting USD$12.3 b in 2015.26
Cambodia has signed Memorandums of Understanding (MOUs) with Thailand, Malaysia and the Republic of Korea. In 2016, remittance inflows from Cambodians working outside the country were estimated at US$431 million.27 In April 2017, Cambodian Labor Minister Ith Samheng was quoted saying that more than one million Cambodians worked overseas.28 Illegal border crossings from Cambodia to Thailand are common. In 2015, 55,626 Cambodians were deported through the Poipet checkpoint.29 Deportations from Cambodia are most commonly to Vietnam, with with 2,570 Vietnamese deportees in 2016.30
Thailand is the key destination country for most Lao migrant workers, more than half of whom are women; and nearly a third of these have been employed as household laborers, with food sales and agriculture being the next most common employment activities.31Laos reportedly raised its minimum wage in part to keep workers from seeking employment in other countries (particularly Thailand), as well to establish conditions that would be more attractive to foreign investment.32 As with those from Cambodia and Myanmar, many Lao migrant workers have been undocumented.
Human rights groups have reported numerous cases of abuse, exploitation, trafficking and slave-like conditions involving migrant workers in the region.
Both Cambodia and Laos are also destinations for foreign workers, particularly from China and Vietnam. Laos has encouraged an influx of skilled and semi-skilled workers to provide the labor necessary for its construction boom. In 2015, Cambodia began a crack-down on undocumented foreigners. Worksites were raided and scores of Vietnamese and Chinese workers were among those deported.
Labor and ASEAN Economic Community integration
ASEAN has been implementing the ASEAN Economic Community (AEC) since 2007. The AEC has the goal of ASEAN economic integration through the creation of an economic space in which there will be a free flow of goods, services, foreign direct investment and skilled labor. While the AEC will facilitate the movement of skilled and professional employees across borders, it is likely to do little for the 88% of ASEAN laborers who are unskilled, many of whom have engaged in irregular migration from Myanmar, Laos and Cambodia to Thailand.33
In 2007 the ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers was adopted, but right to 2017, limited efforts have been made to enforce the obligations in the declaration. Philippines President Rodrigo Duterte said in February 2017 that he planned to push harder for the adoption of a binding regional treaty to protect the human rights of migrant workers during his chairmanship of ASEAN.34 The Asian Forum for Human Rights and Development (Forum Asia) pointed out in 2016 that a majority of migrant workers deployed in ASEAN countries are women who are vulnerable to human trafficking and exploitation.35
Slavery and human trafficking
Modern slavery and human trafficking are significant issues in the Lower Mekong. Modern slavery typically refers to conditions such as debt bondage and other types of forced labour.
The 2018 Global Slavery Index ranks 167 countries based on the proportion of the population that is estimated to be in modern slavery.36 Cambodia is listed at 9th place, with an estimated 16.8 victims per 1,000 population – 261,000 people.37 Actual numbers are higher for Myanmar (575,000 people, or 11 victims per 1,000 population) and Thailand (610,000 people, almost 9 people per 1,000 population).38
The US State Department publishes a regular report on human trafficking. Countries are ranked into one of four tiers: Tier 1, Tier 2, Tier 2 Watchlist and Tier 3. The ranking is based on a government’s efforts to combat trafficking, not the scale of the country’s problem. Tier 1 countries have the best response to trafficking; Tier 3 countries are doing comparatively little. In the 2018 Report, Cambodia, Thailand and Vietnam are placed in Tier 2 while Laos and Myanmar (which the report refers to as Burma) are two steps lower on Tier 3, the poorest rating.39 The report details what each government is doing, and outlines recommendations for further action.
Related to labor
- Social development
- Economy and commerce
- Population and censuses
- Urban administration and development
- 1. National Wages and Productivity Commission, Philippines, 2018. http://www.nwpc.dole.gov.ph/pages/statistics/stat_comparative.html Accessed 30 November 2018.
- 2. Ibid
- 3. Dezan Shira and Associates, 2018. Vietnam briefing – Vietnam to Hike Minimum Wages by 5.3 Percent in 2019. 17 August 2018. https://www.vietnam-briefing.com/news/vietnam-to-hike-minimum-wages-by-5-3-percent-in-2019.html/ Accessed 30 November 2018.
- 4. International Labour Organization. “Country profiles: Cambodia.” Accessed 31 October 2015. www.ilo.org/ilostat/faces/home/statisticaldata/ContryProfileId?_adf.ctrl-state=vv0njesvb_414&_adf.dialog=true&_afrLoop=4717172277077096
- 5. Ministry of Information, 2018. 2019 Minimum Wage For Cambodian Garment And Footwear Workers Sets At US$182. 5 October 2018. http://information.gov.kh/detail/225898 Accessed 30 November 2018
- 6. Trading Economics website. http://www.tradingeconomics.com/thailand/employment-in-agriculture-percent-of-total-employment-wb-data.html Accessed 12 May 2017.
- 7. ILO estimates based on national labour force surveys, with the exception of Brunei Darussalam (Population Census), Cambodia (Socio-Economic Survey), and Myanmar (Integrated Household Living Conditions Survey). In ABD and ILO. 2014. ASEAN Community 2015: Managing Integration for Better Jobs and Shared Prosperity. Bangkok, Thailand: ADB and ILO, 32. Accessed 22 July 2015. http://adb.org/sites/default/files/pub/2014/asean-community-2015-managing-integration.pdf.
- 8. World Travel and Tourism Council, TRAVEL & TOURISM ECONOMIC IMPACT 2017 CAMBODIA. https://www.wttc.org/-/media/files/reports/economic-impact-research/countries-2017/cambodia2017.pdf Accessed 1 June 2017.
- 9. World Travel and Tourism Council 2018. Travel and Tourism Economic Impact 2018 Cambodia. https://www.wttc.org/-/media/files/reports/economic-impact-research/countries-2018/cambodia2018.pdf Accessed 30 November 2018.
- 10. Ibid
- 11. Ministry of National Planning and Economic Development (MNPED). 2011. Integrated Household Living Conditions Survey (IHLCS) Poverty Profile Report, 2011. Yangon: MNPED, Sida, UNICEF and UNDP. Accessed 22 July 2015. http://www.mm.undp.org/content/dam/myanmar/docs/FA1MMRPovertyProfile_Eng.pdf.
- 12. The Arbitration Council. “Minimum Wage Determination in Cambodia.” Accessed 23 June 2015. http://www.arbitrationcouncil.org/en/post/6/Minimum-wage-determination-in-Cambodia.
- 13. ILO June 2018. Cambodian Garment and Footwear Sector Bulletin Issue 7. June 2018. https://www.ilo.org/asia/publications/issue-briefs/WCMS_631686/lang–en/index.htm Accessed 31 October 2018
- 14. Pech Sotheary 2017. “PM explains differences in the minimum wage”, Khmer Times, 23 March 2017. http://www.khmertimeskh.com/news/36795/pm-explains-differences-in-the-minimum-wage/ Accessed 12 May 2017.
- 15. Lao PDR Trade Portal. 2013. “Notification on the Amendment of the Minimum Wage for Workers in Lao PDR.” Accessed 23 June 2015. http://laotradeportal.gov.la/index.php?r=site/display&id=823#.VYkWg1WqpBc
- 16. National Wages and Productivity Commission, Philippines, 2018
- 17. Trading Economics. “Thailand Minimum Daily Wage.” Accessed 23 June 2013. http://www.tradingeconomics.com/thailand/minimum-wages.
- 18. Zolzaya Erdenebileg 2016. “Daily Minimum Wage Rates in Thailand to Increase from January 1, 2017” December 2, 2016, ASEAN Briefing. http://www.aseanbriefing.com/news/2016/12/02/daily-minimum-wage-thailand-increase-january-1-2017.html Accessed 12 May 2017.
- 19. Conventus Law, 2018. Thailand – New Minimum Wage And Relevant Relief Measures. 11 March 2018. http://www.conventuslaw.com/report/thailand-new-minimum-wage-and-relevant-relief/ Accessed 30 November 2018.
- 20. Dezan Shira and Associates, 2018.
- 21. Luther News 2018. Myanmar News, New Minimum Wage in Myanmar, Luther Law Firm, May 2018. https://www.luther-lawfirm.com/fileadmin/user_upload/PDF/Newsletter/Myanmar/News-Alert_New_Minimum_Wage_2018.pdf Accessed 30 November 2018.
- 22. Charles Rollet and Sen David, 2016. “Gender wage gap daunting”, The Phnom Penh Post, 12 February 2016. http://www.phnompenhpost.com/national/gender-wage-gap-daunting Accessed 12 May 2017.
- 23. ILO. 2014. Wages in Asia and the Pacific: Dynamic but Uneven Progress. Bangkok: ILO. Accessed 20 June 2015. http://www.ilo.org/wcmsp5/groups/public/—asia/—ro-bangkok/—sro-bangkok/documents/publication/wcms_325219.pdf.
- 24. World Bank Group 2016. Migration and Remittances Factbook 2016 Third Edition http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1199807908806/4549025-1450455807487/Factbookpart1.pdf Accessed 12 May 2017
- 25. Alex Ma 2017. “Labor Migration from Myanmar: Remittances, Reforms, and Challenges” Migration Policy Institute January 18 2017. http://www.migrationpolicy.org/article/labor-migration-myanmar-remittances-reforms-and-challenges Accessed 1 June 2017.
- 26. World Bank Group 2016. Op cit.
- 27. World Bank, Cambodia Economic Update April 2017. http://documents.worldbank.org/curated/en/780641494510994888/pdf/114938-PUBLIC-may-16-8pm-Cambodia-Economic-report-v2-s.pdf Accessed 1 June 2017.
- 28. Mom Kunthear 2016 op cit.
- 29. Saing Soenthrith. “More than 50,000 migrants deported by Thailand in 2015.” The Cambodia Daily, December 7 2015. Accessed 27 November 2015. https://www.cambodiadaily.com/news/more-than-50000-migrants-deported-by-thailand-in-2015-102223/
- 30. Chan Veasna, 2017. “More than 3,500 foreigners deported in 2016”, Khmer Times, 6 January 2017. http://www.khmertimeskh.com/news/33975/more-than-3-500-foreigners-deported-in-2016/ Accessed 12 May 2017.
- 31. Table 1.4 in Huguet, Jerrold W. and Aphichat Chamratrithirong, eds. 2011. Thailand Migration Report 2011. Bangkok, IOM Thailand, 12. Accessed 24 June 2015. iom.int/bookstore/free/TMR_2011.pdf.
- 32. 2015. “Laos’ New Minimum Wage May Take Effect Next Month: Report.” The Nation, 19 January. Accessed 22 July 2015. http://www.nationmultimedia.com/business/Laos-new-minimum-wage-may-take-effect-next-month-R-30252182.html.
- 33. Sugiyarto, Guntur and Dovelyn Rannveig Agunias. 2014. “A ‘Freer’ Flow of Skilled Labour within ASEAN: Aspirations, Opportunities and Challenges in 2015 and Beyond.” Bangkok and Washington D.C.: IOM and Migration Policy Institute. Accessed 24 June 2015. http://publications.iom.int/bookstore/free/MPI_Issue11_2Dec2014.pdf.
- 34. ASEAN Trade Union Council, “Asean Chair Duterte pushes for migrant protection treaty”. February 2017. http://aseantuc.org/2017/02/asean-chair-duterte-pushes-for-migrant-protection-treaty/ Accessed 1 June 2017.
- 35. Ibid
- 36. Global Slavery Index 2018. https://www.globalslaveryindex.org/2018/findings/highlights/ Accessed 30 September 2018.
- 37. Ibid
- 38. Ibid
- 39. US State Department 2018. 2018 Trafficking in Persons Report. Washington D.C. https://www.state.gov/j/tip/rls/tiprpt/2018/ Accessed 30 June 2018.