Chances Slim for Garment Worker Wage Increase

An industry-wide survey re­leased by the Cambodia Institute of Development Study earlier this year found that garment workers need a minimum of $90 per month in order to survive “decently,” but officials at the Ministry of Labor say the chances of workers achieving such a wage are slim in the current economic climate.

Oum Mean, Secretary of State at the Ministry of Labor, said that the downturn in the garment industry was not lending itself to a pay rise for workers at the present moment.

“What we are focusing on now is retaining the number of factories we have in the country,” he said, adding that factory owners might move to other countries if the government increases the minimum wages of workers.

“People who ask for more only think about one side of the situation,” he added.

Despite declining new orders, frequent factory closures and widespread layoffs in Cambodia’s garment industry, a group of seven trade union federations said in the February survey that the government must increase the minimum wage for workers by more than 80 percent, because their wages fall far behind the cost of living.

Findings in the survey, entitled the “Living Wage Survey for the Cambodia Garment Industry,” which questioned 353 workers in the Phnom Penh region on their monthly salaries, showed that the average effective income for garment workers excluding overtime is $67 per month. With overtime this figure reaches $79.

However, garment workers were found to spend a total of $72 per month, of which $57 is on their “personal basic needs” and $15 is on financial commitments to the household.

“The $57 per month [about $1.84 per day] is far below the NIS figure for the average person living in Phnom Penh, which is $3 per day,” the survey states, referring to the government’s own National Institute of Statistics.

The situation justifies why 85 percent of the 353 interviewees said they were not satisfied with their current salary, the report states.

In conclusion, the survey report says that the current effective wage in the garment industry of $79 per month “is not a living wage.”

“To live in Phnom Penh workers need more than $3 a day,” said Chhoun Monthol, president of the Cambodian Union Federation and spokesperson for the wage increase initiative, reiterating the survey findings that workers were currently surviving on about $1.90 per day.

The $90-wage request would see the minimum wage rise from the current level of $50 per month for eight-hour workdays. Garment workers also currently receive by law a $6 cost of living allowance, plus a $5 mandatory bonus.

Mr Monthol added that the productivity inside Cambodia’s factories – an issue that both the private sector and development partners have raised as a major issue hindering the sector’s growth potential – would increase if wages went up.

“We are united for this moment on this regard,” he said. “It’s what we call common interest.”

Chea Mony, president of Free Trade Union, said that dramatic inflation since 2006 on essential commodities like food and gasoline meant garment workers need at least $130 per month to support their families.

“The government doesn’t have the willingness to help the garment workers raise their salary,” he said. “The corruption of government officials means that the garment worker’s salary can not go up.”

But Albert Tan, treasurer at the Garment Manufacturer’s Association of Cambodia, said that the workers were already getting paid enough.

“I don’t think the industry can afford $90 per month. What would be left over for the garment sector to operate?” he asked.

“Everybody has to contribute. Workers have to produce more. If they can not meet their targets, how can we expect the wage to go up,” he said, adding that factory owners already have crippling costs related to compliance regulations and meeting health and safety standards.

But according to the survey, because overtime hours are currently being reduced due to the economic crisis, it shows that the living standards of garment workers are highly dependent on the economic situation, with little buffer for when times get tough.

“[Therefore,] to make the environment conductive for both employers and workers, there is an urgency to institutionalize the living wage, which should not be dependent on overtime,” the survey reads.

You Hong, factory adviser for the International Labor Organization in Cambodia, said that the current wage for garment workers is unacceptable.

“Yes, they struggle to survive,” he said, adding that although some workers can earn up to $100 per month with overtime, many within the industry are reduced to earning between $50 or $70.

Mr Hong said, however, that a rise in pay would not necessarily add to the productivity within the sector.

“In the past we have seen that a 20 percent increase in pay didn’t result in the productivity getting better,” he said.

    (Additional reporting by Chorn Chansy.)

 

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