Government to Meet Over January Minimum Wage Increase

By Aun Pheap and Dene-Hern Chen
The Cambodia Daily, November 26, 2013

The current government-mandated minimum wage of $80 a month for garment factory workers will be increased in January 2014, though the amount it will be raised by has not been determined, a Labor Ministry official said Monday.

Prak Chanthoeun, director-general of the Labor Ministry’s labor conflict committee, said Monday that there will be a meeting on Wednesday between the government, factory owners, and unions to discuss the imminent wage increase.

“Even though we cannot say how much the wage would be raised, the government policy is that they will raise the wage in January 2014,” Mr. Chanthoeun said. “We need to discuss thoroughly, because we are afraid when we raise the wage for the workers the raised wage will affect the market prices.”

Garment exports in the first 10 months of 2013 have soared to more than $4.7 billion, a 23 percent year-on-year increase. But the sector is experiencing more frequent strikes than ever before, with the Garment Manufacturers’ Association in Cambodia (GMAC) recording 83 strikes during the first seven months of this year, most of which have involved demands for higher wages and more benefits.

The government raised the monthly minimum wage to $80 a month in May in the midst of a heated national election campaign in which the opposition CNRP pledged to raise the wage to $150 if they won the July 28 poll. After the ruling CPP suffered major losses in the election, the government promised in September to revisit the issue of garment sector wages.

Kong Athit, vice president of the Coalition of Cambodian Apparel Workers Democratic Union, said his members are trying to negotiate a raise to $154 a month, though he believes an appropriate amount would be more than $200.

“If they could raise it to $230 a month, then the workers would be able to save money,” Mr. Athit said.

Ken Loo, secretary-general of GMAC, said even a small increase in wages would be immediately felt by factory owners.

“It’s safe to say that it would be very difficult to pass on the promised increases to the buyers totally,” Mr. Loo said, adding that garment manufacturers are in a tough spot as they are currently receiving orders from brands for the spring season, but are not sure what prices to quote them because of the looming wage increases.

“If they quote high, they might not get the order. If they quote low, they might get losses if the wages are revised,” Mr. Loo said.

International clothing brands, which have enormous leverage in terms of industry change, must remain committed to Cambodia even if factories raise prices, said Dave Welsh, country head of Solidarity Center, an international labor rights organization.

“They must give the government assurance, both privately and publicly, that they will support the government’s efforts to treat the Cambodian garment industry as a model industry, where the minimum wage is also a living wage,” Mr. Welsh said.