Cambodia to increase garment industry minimum wage 9.4 per cent, but short of workers’ demand

PHNOM PENH, Cambodia – Cambodia announced Thursday it will raise the minimum wage for clothing workers by 9.4 per cent to $140 a month, hoping to ease tensions in the country’s main export industry.

A Labor Ministry statement said the government is increasing the wages on instructions from Prime Minister Hun Sen after eight days of tense negotiations in a committee representing employers, workers and the government.

The new wages take effect at the beginning of next year. The increase falls short of the $160 a month wage proposed by unions.

Three years ago, a union campaign to double the then-minimum wage of $80 in the textile, garment and footwear industries resulted in clashes with police and a crackdown on public protests. A $100 level was set for 2014 and $128 this year but tensions over wages remained high.

In early 2014, at least four people were killed and more than 20 were injured when police outside Cambodia’s capital opened fire to break up a protest by striking garment workers.

The clothing and footwear industry is Cambodia’s biggest export earner, employing about 700,000 people in more than 700 garment and shoe factories. In 2014, the Southeast Asian country shipped more than $6 billion worth of products to the United States and Europe.

But as in other developing countries in the region such as Bangladesh and Vietnam that rely heavily on their garment industries, wages in Cambodia remain low by international standards.

“I am not satisfied with this new wage,” said Ath Thorn, president of the Coalition of Cambodian Apparel Workers’ Democratic Union, who took part in the negotiations. “I think the net salary of each garment worker should be at least $150 per month, not $140 as cited by the Labor Ministry.”

The union had also rejected the 2015 minimum wage of $128 per month, but the labour movement in Cambodia remains weak. The union’s rejection means little to the government and factory owners, who will simply go ahead and pay the new wage of $140.

Because of that, workers often resort to street protests, which are unnerving for the government because the major unions are generally allied with the opposition Cambodia National Rescue Party, whose political strength has been growing in recent years.

The Labor Ministry said that when other benefits are calculated, the workers will make an average of $157 to $168 monthly next year.

In a statement, the International Labor Organization acknowledged the efforts by all parties to reach a consensus.

“As wages gradually increase, it is important for the industry to improve overall productivity, and for garment buyers to examine their purchasing practices,” it said.

Labour Minister Ith Samheng acknowledged that the new wage is not as much as workers had demanded, but noted that the majority of negotiators agreed to it.

“The new wage does not comply with the demands of all sides, but this amount is acceptable,” he told reporters.