PHNOM PENH, Cambodia — The minimum wage in Cambodia’s garment sector will be raised to $128 beginning in 2015, a 28 percent increase over the current $100 monthly wage.
The Ministry of Labor on Wednesday said garment and footwear workers will receive $128 a month, $5 more than what the Labor Advisory Council suggested earlier in the day. This is based on a recommendation from Prime Minister Hun Sen, the ministry said. It added that workers under a probation period will receive a monthly wage of $123. Under the labor law, a probation period can last from one to three months.
Earlier in the day, Labor Minister Ith Sam Heng revealed that a majority of the tripartite Labor Advisory Council had voted for $123 a month as the new minimum wage, an amount submitted by the government as it is slightly above the poverty line of $120. The manufacturers’ amount of $110 got seven votes, while the unions’ demand for $140 a month got only two votes.
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“We have considered all aspects of this issue. I believe that the workers will be able to change their standard of living to be better than the previous years and factories will be able to afford this new amount,” Ith Sam Heng said. “The international community is keeping track of us, so now there will be more orders flowing to Cambodia and this will create more investment opportunities.”
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He also urged unions not to protest just because they did not get their desired wage.
As before, workers will receive $7 each month for housing and transportation and $10 as an attendance bonus if they do not miss a day of work. The LAC also pledged to revisit the minimum wage every year in June.
This decision comes after almost a year of instability in Cambodia’s $5.5 billion apparel industry. Dissatisfied with the government’s announcement on Dec. 31 that the monthly minimum wage would be $100, workers continued a nationwide strike into 2014. Protests ceased abruptly after Jan. 3, when state armed forces opened fire on demonstrating workers, killing at least five.
Since then, wage talks reached an impasse and industry tensions were reflected in Cambodia’s third-quarter export figures, which were down by 4 percent to $1.61 billion compared with $1.68 billion in the same period last year.
Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, which represents the country’s more than 500 factories, said the $128 monthly minimum wage is higher than what some factory owners are able to pay and would lead to closures of smaller factories.
“What we’ve been saying all along is that factories can no longer operate under an increase [larger than $10],” Loo said.
He added that it is unclear whether any increase below the unions’ demands would stem industrial action.
Dave Welsh, country director of the Solidarity Center — a labor rights organization affiliated with the AFL-CIO — said a wage raise would have to be “dramatic” in order to have a pronounced improvement on workers’ lives, as living and food costs in districts housing factories often increase alongside incremental wage raises.
“It will cause huge disappointment even with the $5 top-up — $128 is only $8 more than the government’s official stance for what constitutes poverty and this is a $5.5 billion industry,” Welsh said.
Ath Thorn, president of the Coalition of Cambodian Apparel Workers Democratic Union, an independent union that is part of the LAC, expressed surprise over the prime minister’s abrupt decision, and said he would consult with his members on whether they should campaign for more.
“What we want to get is a decent minimum wage that can allow workers to live with dignity, and from there, that wage can increase based on inflation every year,” he said.