Myanmar

Job losses and income security in Myanmar

Multiple shocks of COVID-19, the military takeover and a surging global price of food, oil and other commodities have significantly hit the lives of Myanmar people since 2020. Concerning employment, despite a slight recovery in the first half of 2022, unemployment and underemployment are reportedly still worse than the time before the pandemic started in 2020. Many workers and their households moved to rural areas and the agricultural sector, but the global price increase negatively impacted their economic activities and household consumption.

The ILO conducted a study to understand a mechanism of job losses and consequences of unemployed workers in times of crisis. The ILO research team interviewed 1,500 former wage employees across Myanmar who experienced employment termination or temporary suspension of work between 1 March 2020 and 28 February 2022. Using the survey data, the study assessed who lost jobs; when and why they lost jobs; how their job losses were compensated; how temporary suspension of work affected workers; how they coped with these employment shocks; and how they returned to work.

An ILO brief also summarises results of a comprehensive report for general readers. The findings will ideally help not only illustrate the state of challenges today but also formulate sound policies for unemployment protection once Myanmar has restored democracy and rebuilt the rule of law.

Who lost jobs?

The service and industry sectors account for two-thirds and one-third of employment termination, respectively, while the agriculture sector lost few jobs. The wholesale trade and retail trade sector had the largest share (24.5 percent), followed by the textiles, wearing apparel, leather and related manufacturing sector (14.6 percent), the construction sector (8.5 percent), the other manufacturing sector (8.4 percent), the accommodation and food service sector (7.6 percent), the education sector (7.3 percent) and so on.

When were jobs lost?

The prevalence of employment termination increased by 23.5 percent after the military takeover. Informal employment or less productive jobs were constantly lost over time, and formal employment or more productive jobs were lost after the military takeover. A comparison in average monthly incidence shows an increase by 48 percent for the high-educated and 18 percent for the low-educated; 144 percent for written contract and 4 percent for oral agreement; 50 percent for social security active member and 16 percent for uninsured worker; and 44 percent for medium-large enterprises and 9 percent for micro-small enterprise. An increase in job losses in knowledge intensive sectors was notable by 323 percent for the financial and insurance sector and 314 percent for the education sector.

The public sector started losing jobs after the military takeover, while the private sector continued losing jobs over time. Eighty-five percent of employment termination in the public sector occurred after the military takeover, and 70 percent were observed between February and May 2022. The prevalence of monthly incidence increased by 392 percent. The sharp increase was led by the public education sector. Almost all job losses in the public education sector were observed after the military takeover (95 percent). The major reason for employment termination in the public sector was resignation (80 percent), and all dismissal cases in the public sector were found after the military takeover.

How were jobs lost?

Voluntary resignation (70 percent) was the most common reason for employment termination, followed by dismissal (28 percent). Few workers reported the expiry of fixed-term contracts or mutual agreements for contract cancellation. Most dismissals (78 percent) were for lawful reasons including ordinary misconduct (1 percent), liquidation of business (28 percent) and suspension of business due to unforeseeable events (49 percent).

Workers with higher employability and productivity are slightly more likely to resign. The share of resignation decreases and the share of dismissal increases as workers are older and less educated. Younger workers and the high-educated may find more job opportunities, so that they may opt for resignation. Likewise, workers with formal employment and formal sector enterprises are less liable to resign. The share of resignation was relatively lower for workers with a written contract, social insurance, private insurance, or medium-large enterprises. Exceptionally, the share of resignations was much higher in the government than in the private sector.

Dismissal dramatically increased after the military takeover. The monthly average incidence of resignation increased by 22 percent after the military takeover, while that of dismissal increased by 41 percent. The rapid increase in dismissals after the military takeover was led by non-standard reasons instead of standard ones. Standard reasons rose relatively at a modest level, only by 13 percent for liquidation of business and 11 percent for suspension of business due to unforeseeable events. Non-standard reasons categorised as ‘other reasons’ increased significantly after the military takeover by 690 percent. Nearly one-third of non-standard reasons for dismissal provided in a narrative form were related to the factors borne by the military takeover, such as employee’s participation in CDM or other political activities and employee’s refusal to come to work due to security concerns. These combined results may suggest the military takeover and related actions like CDM have greatly contributed to increasing job losses in the country.

Who paid the price of lost jobs?

When terminating employment relationship, employees and employers are generally required to give 30-day advance notice prior to resignation or dismissal. However, only one third of workers and employers complied with the 30-day advance notice and nearly half of workers and employers resigned or dismissed without any advance notification to the other party. Concerning dismissal in practice, many employers appear to consider it an option to choose whether to notify their employees and continue paying salary for 30 days or to pay in lieu of notice and immediately dismiss. Forty-three percent of dismissed workers received the 30-day advance notice or pay in lieu of notice to have their salary compensated. However, the rest 57 percent received no compensation at all or only part of wage that they were supposed to receive from work in the last month before dismissal because of employer’s non-compliance.

Dismissed workers are generally entitled to statutory severance pay, but in practice, workers in informal employment less likely enjoyed it. Only 29.5 percent of dismissed workers received severance pay. Among workers with entitled reasons for severance pay, 55 percent of workers dismissed for liquidation of business, and 27 percent of dismissed workers for suspension of business due to unforeseeable events enjoyed severance pay. Workers in formal employment with written contracts, fixed-term contracts, social insurance coverage, large enterprises and in the textiles, wearing apparel, leather, and related manufacturing sector were more likely to receive severance.

By construction, severance pay provides better pay to workers with stable and long-term employment and high wage, and therefore, more likely protect workers in formal employment than workers in need. Among workers who received severance pay, the average severance was MMK 329,072 or 1.9-month equivalent to monthly wage. Women and youth were more likely to receive lower severance pay than men and senior workers. The average severance pay for men and senior workers was 42 percent and 68 percent higher than their counterparts, respectively, and income replacement relative to monthly wage follows the same trend. Workers who served for 30 months and more received MMK 483,930 or a 2.9-month salary, while workers with less than 30 month-service received MMK 149,318 or 0.9-month salary.

During the survey period, some former wage employees returned to work. Of whom, 70 percent found wage jobs again, and 30 percent chose to become self-employed as their first job after employment termination. Workers who returned to wage employment spent 167 days on average from the day of employment termination. Marriage encourages male workers to return to wage employment quicker, but it makes female workers spend more time returning to employment. Workers with less experience, low productivity, informal employment and informal sector enterprises tend to return to work earlier than their counterparts. Most returning workers to wage employment relied on informal sources of information to find jobs. Of workers who found wage employment through a formal approach, almost all used online platforms to find new jobs. Moreover, self-employment appears to be an option for making a living instead of being unemployed. In particular, it is notable that most former government employees who returned to work became self-employed.

Income loss without job loss

Many workers lost income from work while they were still being employed. During a period of temporary suspension of work attributable to employers, 60 percent of workers did not receive salary at all, 18 percent received a reduced salary, and only 22 percent received a full salary. Moreover, 26 percent of workers who participated in the survey experienced their wage payment delayed or reduced. Fifty-two percent of the workers experienced a reduction in regular business hours or overtime, of whom 64 percent found that these events lowered their income from work.

Reduction in working hours may be caused not only by employer’s decision but also employee’s decision to avoid exposure to health or security risks over the pandemic, the military takeover and related violence. Fifty-three percent of workers and 28 percent of workers had to be absent from work for health concerns caused by the pandemic and for security concerns, respectively.

Conclusion

Our survey concluded by asking workers which expenditure component of their household increased since the beginning of the pandemic and how they fulfilled the increased needs for household consumption. Most workers reported an increase in food expenditure and health care expenditure. Eighty-nine percent of workers relied on income from work to fulfil their increasing household needs as the most reliable source of income. Many workers had to take unsustainable coping strategies by withdrawing their bank saving, lending or borrowing, and selling assets such as houses, land, stock and bond, while few relied on public supports or severance pay.

Who paid the price of these multiple shocks? It is evident that workers struggled securing income on unemployment. Workers experienced income loss because of job loss, temporary suspension of work and reduction in working hours, while their household expenditure increased simultaneously. Almost none of public schemes or statutory employer’s liability schemes effectively helped workers secure income to cope with the multiple shocks, and workers themselves had to find solutions to make a living without such support. Although severance pay is only the statutory scheme that could address income security during unemployment spells in the absence of an unemployment insurance scheme, the schemes showed limited ability to protect workers in need.

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