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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.

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