Logo of Phnom Penh Post newspaper Phnom Penh Post - Minimum wage set

Minimum wage set

LAC meeting at the Ministry of Labour
LAC meeting at the Ministry of Labour. Vireak Mai

Minimum wage set

Vitriol rang from all sides yesterday following a government decision to raise the monthly minimum wage in the garment sector to $128, with labour unions declaring it too little and employer representatives claiming such a large raise could close factories.

The Ministry of Labour’s Labour Advisory Committee (LAC) held a vote yesterday morning and emerged with a figure of $123 as next year’s industrial floor salary – up from the current $100.

A meeting with Prime Minister Hun Sen directly after the vote led Labour Minister Ith Sam Heng to raise that figure by an additional $5, to $128, a Labour Ministry statement reads.

Union leaders who battled for $140 remained unsure of whether their members would accept the amount, or if they would be prompted to launch a campaign against the government-mandated figure.

Labour rights advocates, meanwhile, expressed concerns that the move could provoke strikes and cause international brands to pull out of Cambodia.

“I hope that unions will understand, because they joined the discussion, that we cannot meet their demand,” said Sam Heng.

He discouraged demonstrations akin to those after last year’s minimum wage decision, which resulted in arrests, violence and at least five deaths.

“Don’t use demonstrations to push for your demands,” Heng said.

Including transportation, seniority and other bonuses, workers will be able to earn a total monthly salary of between $147 and $156 a month next year, a Labour Ministry statement reads.

Unions were clear on their minimum financial needs, said Ath Thorn, president of the Coalition of Cambodian Apparel Workers’ Democratic Union (C.CAWDU) and one of two people who voted for a $140 wage at the LAC meeting.

C.CAWDU members will meet on Sunday to discuss their next course of action. “Until [we receive] $140, I’m not satisfied,” Thorn said. “We will discuss with my members; if my members want to campaign [against the wage], we will.”

Disappointment among unions spread beyond independents to government-leaning unions as well.

The LAC’s vote for $123 was unacceptable, said Chuon Mom Thol, president of Cambodia Union Federation (CUF). But even though the final amount is less than unions’ collective demand, the subsequent $5 addition cushioned the blow, he added.

“Now we’ve got $8 above the poverty line, and next year, there will be another negotiation,” Mom Thol said, referring to the $120 poverty line calculated by the International Labour Organization. Based on information “received from the ground, [CUF] rank-and-file members accept” the $128 wage, he added.

But from the point of view of Cambodia’s factory owners, the hike will prove disastrous.

The 28 per cent increase will bankrupt some employers, said Nang Sothy of the Garment Manufacturers Association in Cambodia (GMAC).

Between “30 and 50 factories” will close, losing jobs for about 50,000 workers, she said, though employers will still abide by the government’s new wage requirement.

Community Legal Education Center consultant Joel Preston scoffed at GMAC’s “scare tactics” which, he said, lacked any evidence. Preston noted consistent growth in Cambodia’s largest export business, despite GMAC’s persistent assertions that wage increases will drive the industry out of the country. Several brands that buy from Cambodia, H&M among them, have already made public commitments to financially facilitate salary hikes.

What the government and brands should worry about, he continued, is possible unrest resulting from the Labour Ministry’s decision yesterday.

“The government is walking a fine line,” Preston said. “I think there’s a real possibility that we could see a repeat of last year; I don’t think the government or the brands can afford that.”

Even without the violence Cambodia experienced in January, brands could fear the worst-case scenario and leave the country proactively, said Dave Welsh, country director for labour rights group Solidarity Center.

“You may see brand pullout based on the fear of what they anticipate,” Welsh said.

Given that brands had publicly committed to paying higher prices to support a living wage, Welsh lamented the LAC’s squandering of a perfect chance to raise wages to a point that would have satisfied workers across the board.

“We had this historic opportunity,” Welsh said.

MOST VIEWED

  • Time to avert disastrous Covid situation: officials

    The Covid-19 situation in Cambodia is heading towards further large-scale community transmission as the total number of confirmed cases is nearing 61,000 and the death toll passed 900 on July 10, senior health officials warned. Ministry of Health spokeswoman Or Vandine expressed concern that the country was going

  • Visa A holders get to quarantine at Himawari Hotel

    The Ministry of Health has permitted foreign diplomats, UN and International NGO officials to undergo quarantine at Himawari Hotel in the capital in case they do not have a separate place suitable for this purpose, but the government would not be responsible for the expenses.

  • Baby saved as mother is lost to Covid

    Newborn baby Neth David has had a rough start in the world. His mother, Vong Daneth, was seven months pregnant when she contracted a severe case of Covid-19. When it became clear to her doctors that she would not survive, they performed a cesarean section

  • Jabs for kids bring hope for school reopenings

    Cambodia is tentatively planning to reopen schools – at least at the secondary level – when the vaccination of children aged 12-17 is completed, even though daily transmissions and deaths in other age groups remain high. Schools across the country have been suspended since March 20, one month

  • Two luxury hotels latest quarantine options for inbound travellers

    The Inter-Ministerial Committee to Combat Covid-19 has designated two luxury hotels as alternative quarantine options for travellers who wish to enter Cambodia through Phnom Penh International Airport – Sokha Phnom Penh Hotel & Residence and the Courtyard by Marriott Phnom Penh. In a notice detailing guidelines issued

  • Hun Sen: Get 12-17 age group ready for Covid jabs

    Prime Minister Hun Sen has told parents of children aged 12-17 in Phnom Penh and the provinces of Kandal and Preah Sihanouk to get them ready for vaccinations soon. “There is a need to vaccinate children and youths aged 12 to 17. According to the statistics provided