Labor

Despite economic growth, workers in many of the countries continue to earn low wages. As of November 2014, a general laborer in Myanmar would earn about US$60 per month and a skilled laborer about US$150.1 Also at the lower end, wageworkers in Cambodia have averaged US$121 a month (2012), followed by Vietnam with US$197 (2013).2 Wages of regular employees in Thailand were higher at US$391 (2013).

A worker sews a garter to a skirt in a garment factory outside Phnom Penh, Cambodia. Photo by World Bank, Flickr. Licensed under CC BY-NC-ND 2.0.

A worker sews a garter to a skirt in a garment factory outside Phnom Penh, Cambodia. Photo by World Bank, Flickr. Taken 19 February 2013. Licensed under CC BY-NC-ND 2.0.

Share of the employment sector

Though agriculture is still the largest employer in all Lower Mekong countries, 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. Industry labor doubled in Cambodia between 2004 and 2012, primarily due to increases in the textile and apparel (garment) manufacturing sector, followed by food and wood products.3

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. 74 percent of the workforce in Myanmar can be classified as informal4, as can those in Cambodia and Laos.

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. Myanmar, which adopted a framework labor law in 2013, is in the process of establishing wage rates. A general trend in the region has been substantial increases in minimum wage rates, either generally or as to specific sectors. Cambodia, Laos and Vietnam saw significant minimum wage increases in 2015, and Thailand set a national minimum wage in 2013 that overtook a previous system that differentiated by region, and which was particularly beneficial to those working in the poorer regions.

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.5 The Ministry has only established an express wage minimum in the garment and shoe sector, which as of 1 January 2015, was US$128 per month.6 The rate reflects an increase of more than 25% in minimum compensation, and followed a period of strikes and protests. While officially applying only to the sector, increases in this wage rate influence those in other sectors. While the increase has been welcomed, workers continue to demand improvements noting that the wage is still low compared to the cost of living.

Laos’ general minimum wage (state employees are dealt with separately) is set by the Ministry of Labor and Social Welfare, and was raised to 900,000 kips (about US$111) per month, effective 1 April 2015.7

Thailand has had a national minimum wage since 1 January 2013, set by a cabinet decision, at 300 Thai baht per day8 (about US$9.80, at that time), although there have been calls since to raise it to 360THB.9 Historically, minimum wages had been set on a regional/per province basis and the action by the Thai government to declare a nation-wide rate was a departure from that practice (and provided a major windfall to poorer parts of the country). The Thai government has since expressed an intent to return to the previous system by which wages vary by province based on the cost of living.10 The decision to reinstate the old practice was made in December 2014, but with no determination of whether there would be an upward adjustment in any rates.

Vietnam, like Thailand, has used a method for determining minimum wage that applies varying rates associated with a location’s cost of living. In November 2014, the Prime Minister approved increases of 15% in wage minimums effective 1 January 2015, applying a sliding scale from VND250,000-VND400,000 (US$12-$19) across four regions, with the highest rate applicable in Hanoi, Hai Phong and Ho Chi Minh City.11

Myanmar’s parliament passed a Minimum Wage Law in March 2013, but the Ministry of Labor continues to collect information supporting rate determination, related to current wages, living standards and workforce size.12

Gender parity

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 and men often receive uneven wages. The gender pay gap is particularly wide in Cambodia where women earn 23.3% (2012) less than men. There is a smaller gap in Vietnam (2013) at -9.4%, and near parity in Thailand (2013) where women earned 1.4% less for similar work.13

Labor migration

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. The Mekong Migration Network has estimated that there are 3 million migrant workers in the region14 with Thailand being their most common destination, dating from Thailand’s economic surge in the early 1990s. By 2006, unskilled labor was being drawn from Cambodia, Laos and Myanmar into Thailand, while Laos and Cambodia saw an influx of higher skilled laborers from Vietnam and China. High skilled labor, sourced from China’s Yunnan and Guangxi provinces, was also flowing into neighboring Laos and Myanmar.15

With the exception of Thailand, which has largely evolved from a country of origin of migrant laborers to a destination for labor, the Lower Mekong countries are all sources of substantial migrant labor. Vietnam has over 500,000 documented migrant workers in 40 countries and territories.16 There were 812,98417 migrant workers from Myanmar registered in Thailand in 2010, and 247,76818 in Malaysia in 2013, although undocumented workers remained high.

Cambodia has recently started to document its workers migrating abroad and has signed Memorandums of Understanding (MOUs) with Thailand, Malaysia and the Republic of Korea. In December 2009 there were 124,761 Cambodians documented as migrant workers in Thailand.19 As in the case of Burmese migrants, a large number of undocumented Cambodian workers persisted in the country. In 2014, after the Thai military take-over of the government, a feared crackdown on millions of undocumented workers in Thailand led to the panicked flight of almost 250,000 Cambodians back across the border in June 2014 alone.

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.20Laos 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.21 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, scheduled for completion in 2015. 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.22

Last updated 19 January 2016

References

  • 1. Nyein Nyein. 2014. “As Lawmakers Raise Pay, Minimum Wage Law Languishes.” The Irrawaddy, 19 November. Accessed 4 June 2015. http://www.irrawaddy.org/burma/lawmakers-raise-pay-minimum-wage-law-languishes.html.
  • 2. ILO. 2014. Wages in Asia and the Pacific: Dynamic but Uneven Progress. Bangkok: ILO, 2. Accessed 20 June 2015. http://www.ilo.org/wcmsp5/groups/public/—asia/—ro-bangkok/—sro-bangkok/documents/publication/wcms_325219.pdf.
  • 3. 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.
  • 4. 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.
  • 5. The Arbitration Council. “Minimum Wage Determination in Cambodia.” Accessed 23 June 2015. http://www.arbitrationcouncil.org/en/post/6/Minimum-wage-determination-in-Cambodia.
  • 6. Howlett, Max and Yun Sophal. “New Minimum Wage Set for 2015.” Accessed 23 June 2015. http://www.b2b-cambodia.com/news/new-minimum-wage-set-for-2015/.
  • 7. 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.
  • 8. Trading Economics. “Thailand Minimum Daily Wage.” Accessed 23 June 2013. http://www.tradingeconomics.com/thailand/minimum-wages.
  • 9. 2015. “Workers Ask for B360 Minimum Wage.” Bangkok Post, 31 March. Accessed 24 June 2015. http://www.bangkokpost.com/news/general/513659/workers-ask-for-b360-minimum-wage.
  • 10. 2015. “B300 Wage to be Scrapped Next Year.” Bangkok Post, 6 June. Accessed 23 June 2015. http://www.bangkokpost.com/news/general/584289/b300-wage-to-be-scrapped-next-year.
  • 11. 2014. “Vietnam Approves Minimum-Wage Hike of 15 Percent in 2015.” Thanh Nien News, 11 November. Accessed 23 June 2015. http://www.thanhniennews.com/business/vietnam-approves-minimumwage-hike-of-15-percent-in-2015-33793.html.
  • 12. Nyein Nyein. 2014. “As Lawmakers Raise Pay, Minimum Wage Law Languishes.” The Irrawaddy, 19 November. Accessed 24 June 2015. http://www.irrawaddy.org/burma/lawmakers-raise-pay-minimum-wage-law-languishes.html.
  • 13. 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.
  • 14. Mekong Migration Network. “Overview of Mekong Migration, General Background.” Accessed 22 July 2015. http://www.mekongmigration.org/?page_id=25.
  • 15. World Bank. 2006. Labor migration in the Greater Mekong Sub-region, Synthesis Report, Phase 1. World Bank. Accessed 22 July 2015. http://siteresources.worldbank.org/INTTHAILAND/Resources/333200-1089943634036/475256-1151398858396/LM_in_GMSs_Nov06.pdf.
  • 16. Bowen, Ruth and Do Van Huong. 2012. Women in International Migration From Viet Nam. Vietnam: UN Women Vietnam and the Vietnam Department of Overseas Labour, Ministry of Labour, Invalids and Social Affairs. Accessed 24 June 2015. http://asiapacific.unwomen.org/~/media/field%20office%20eseasia/docs/publications/2013/women%20in%20international%20labour%20migration%20from%20viet%20nam%20a%20situation%20analysis.pdf.
  • 17. Huguet, Jerrold W and Aphichat Chamratrithirong. 2011. Thailand Migration Report 2011. Bangkok, IOM Thailand. Accessed 24 June 2015. publications.iom.int/bookstore/free/TMR_2011.pdf.
  • 18. UNICEF. “Migration profiles, Malaysia.” Accessed 24 June 2015. http://esa.un.org/MigGMGProfiles/indicators/files/Malaysia.pdf.
  • 19.  Table 1.4 in Huguet, Jerrold W. and Aphichat Chamratrithirong. 2011. Thailand Migration Report 2011. Bangkok, IOM Thailand, 12. Accessed 24 June 2015. publications.iom.int/bookstore/free/TMR_2011.pdf.
  • 20. 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.
  • 21. 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.
  • 22. 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.
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