Cambodia increases garment industry minimum wage 28 per cent, but short of workers’ demand

Workers transport water by motorcycle and cart in Siem Reap, Cambodia. Despite Cambodia’s growing economy 20% of the population live below the poverty line. 1000 Words / Shutterstock.com

PHNOM PENH, Cambodia—Cambodia agreed Wednesday to raise the minimum wage in its important clothing industry by 28 per cent to $128 a month, falling short of labour unions’ $140 proposal.

The Labor Advisory Committee, representing employers, workers and the government, originally agreed on a $123 minimum wage. A Labor Ministry statement said it was increased to $128 after instructions were received from long-serving Prime Minister Hun Sen to do so. The new wage level takes effect at the beginning of next year.

Two years ago, a militant union campaign to double the then-minimum wage of $80 in the textile, garment and footwear sector resulted in clashes with police and a consequent crackdown on public protests. A $100 level was set for 2014, and the unions scaled back their demand for the negotiations over the 2015 level. Employers had proposed the minimum wage be set at $110 for next year.

The clothing industry is Cambodia’s biggest export earner, employing about 500,000 people in more than 500 garment and shoe factories. In 2013, the Southeast Asian country shipped more than $5 billion worth of products to the United States and Europe.

The Coalition of Cambodian Apparel Workers’ Democratic Union has not yet accepted the 2015 wage level, said union president Ath Thorn, who took part in the negotiations.

The Labor Ministry’s statement said that when other benefits were calculated, the workers would be making an average of $147 to $156 monthly next year.

Labour Minister Ith Samheng said he believed that the wage hike would result in better living conditions for the workers.

Labour militancy is a concern for the government, especially because major unions are generally allied with the opposition Cambodia National Rescue Party, whose political strength has been growing in recent years.