PHNOM PENH, Cambodia — Talks over the minimum wage began this week here, with unions struggling to put forth a unified position while manufacturers said that the garment sector is unable to stomach a wage hike similar to the one enacted last year.
As the industry has expanded over the years, workers have begun demanding a higher minimum wage. In light of industrial action flaring up due to these negotiations — and even resulting in violence in previous years — brands sourcing from Cambodia have urged the government to institute a wage-setting mechanism.
Currently, the monthly wage, applied solely to the 700,000 garment and footwear workers in the $5.7 billion industry, is $128 — a 28 percent increase from $100 the year before.
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This week, representatives from different unions met multiple times to try and obtain a consensus over the amount they will present to the Labor Advisory Committee, a governmental body composed of union members, employers and officials tasked with deciding on the wage. But there is still disagreement, said Kong Athit, secretary general of the Cambodian Labor Confederation.
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“It is a bit difficult at the moment,” he said. “Some unions which support government, they don’t want to put a number that is too high.”
Athit said that CLC will base its minimum wage request on a recent survey commissioned by labor rights nongovernmental organization IndustriALL and the Solidarity Center, an international labor rights organization affiliated with the AFL-CIO. Interviewing more than 700 workers around the country about their living expenses and their take-home salary, the survey showed that the average expenditure for a garment worker was $207.50 a month, while their take-home salary, including money made from overtime and bonuses, was $214.
Taking away some unnecessary items like the “costs of mobile phones or alcohol,” Athit said that the minimum wage should actually be around $178 a month.
“We found out what the workers need, so we’re just telling them this is what they need,” he said, dismissing the notion that a drastic wage hike would devastate the industry. “If what the workers need will cause the industry to die, then there’s a problem.”
Rong Panha, a representative of Cambodian Alliance of Trade Union, said that his union plans to ask for exactly $207, according to the survey’s findings of an average workers’ expenditure. Other unions affiliated with the government are proposing $158, which he considers insufficient.
“The workers in Cambodia have to feed their families,” he said. “We don’t agree with this amount [$158] because it is just not suitable for workers.”
On the manufacturers’ end, they are adamant that a drastic increase could cripple the industry. In a press conference on Tuesday, Van Sou Ieng, chairman of the Garment Manufacturers Association in Cambodia, said that 63 percent of their members had voted against having any sort of increase. With the current minimum wage, Cambodia is no longer considered competitive when compared to its regional neighbors, he said.
“If the negotiation process is not good and not fair, and it doesn’t allow factories to survive, then investors will not be interested in investing in Cambodia,” Van said. “Our association lost 35 factories in the last four months.”
GMAC vice chairman John Cha said that they are willing to negotiate on an increase based on inflation, which the ADB currently puts at about 3.5 percent. He added that he hopes that Prime Minister Hun Sen would not tack on extra dollars after the fact just for political gain.
“This year, we told them, ‘Can we just stick with what has been recommended and please don’t keep adding?’ But the political formula is still there,” Cha said, referring to last year’s LAC announcement that the new monthly minimum wage would be $123 a month, only to be supplemented later by $5 under the prime minister’s orders.
Cha was very downbeat on Cambodia’s industrial relations, citing the more than 3,000 unions to be an excessive amount for a country with less than 700 factories.
“Industrial relations in Cambodia are a sore point, really, to the extent that it has been factored adversely into risk assessment by potential investors and buyers,” he said. “Illegal strikes are rampant and union leaders blatantly ignore the Labor Law.”
All parties will take a week to deliberate and negotiate, said Nang Sothy, vice chairman of the LAC, and an announcement is planned for October 5.