Garment Sector Wage Hike a Boon for Landlords

The Labor Ministry on Tuesday appealed to landlords whose tenants work in garment factories to refrain from raising rental prices in response to the sector’s newly announced minimum wage, but it seems proprietors have already decided otherwise.

Starting in January, the monthly minimum wage in the country’s garment sector will jump from $100 to $128 following a government decision last week.

“We did suggest and make an appeal to landlords…to please not increase the price,” Labor Ministry spokesman Heng Suor said.

But he said the government had no plan to approach landlords with this message, and would not impose any kind of regulation on apartment owners.

“At the moment, we follow the free market economy,” Mr. Suor said, suggesting that public housing around factory-heavy areas could eventually help ensure that housing costs do not rise with salaries.

“We will find some way to make housing more affordable for workers,” he said, declining to elaborate further.

With more than 600,000 people estimated to be employed in garment- or footwear-producing factories nationwide, millions of additional dollars will end up in the pockets of the mostly young, female workers.

And their landlords, who rent out small concrete rooms to groups of tenants from out of town, are lining up to take their share.

Along Veng Sreng Street, home to one of the country’s densest concentrations of garment producers, factory staff, who typically pay between $25 and $40 a month per room, told of impending increases.

Landlords, too, said that prices would rise.

“All the businesses around here are ready to raise the rental price,” said Im Vathana, 40, who owns a building with about 20 women living in seven rooms that go for $35 to $40 a month.

“But I will not raise my price because I am not a business, I only help the workers.”

Seng Sopheak, 44, who has upward of 150 factory workers living in his 36 rooms, had similar sentiments.

“Every landlord around here will raise their prices,” Mr. Sopheak said. “But I will not follow because the extra money should be for the workers to keep as savings.”

About a dozen landlords interviewed Tuesday said the same thing: That every proprietor aside from themselves would hike rents.

But among those who pay to stay in the small homes that fill the streets and alleyways running off the industrial thoroughfare, the conclusion that a rent hike is coming was unanimous.

“When he heard about $128, my owner told me that my rent will go up by $5, but he didn’t say when,” said Chan Sam Ath, a 21-year-old seamstress from Svay Rieng province who pays $20 for her one-room quarters in the industrial zone.

Pheng Mey Mey, a 30-year-old head of a team of seamstresses who takes home up to $250 on a good month, said that she had also heard that her rent would increase.

“My supervisor told me that the owner will raise prices by $5 in January,” she said. “He knows because he meets with the landlords to talk about these things.”

Women with experience in the industry said landlords have never missed an opportunity to increase their economic intake following a wage revision—the latest increase is the second since May 2013, when it was raised from $61 to $80.

Loem Lyheng, 27, who has worked in the garment industry for eight years and now earns between $170 and $190 a month, including overtime and allowances, said the rise is a foregone conclusion.

She explained that since 2006, when she was paying $18 in rent while taking home about $80 a month, every pay rise has been met with higher housing costs.

“They raised it after they killed the five,” she said, referring to five garment workers shot dead by military police while protesting for better wages in January, the last time the minimum wage was increased in the sector.

“I am sure they will raise it again—they are businesspeople.”

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