A trio of international union federations has come out against the government’s decision Wednesday to raise the monthly minimum wage for Cambodia’s garment workers from $100 to $128.
Local independent unions, meanwhile, have yet to decide whether to accept the pay hike or go back on strike, but dismissed the latest warning from factories that the raise will force many of them to close and take thousands of jobs with them.
The Labor Ministry announced the new wage on Wednesday afternoon, setting it $5 above the $123 the ministry’s Labor Advisory Committee (LAC) had settled on in a secret ballot that morning. Of the 28 members on the committee—14 from the government and seven each from the unions and factories—only two people voted for the $140 the independent unions had been pushing for.
In a joint statement following the announcement of the new wage, IndustriALL, UNI Global Union and the International Trade Union Confederation said the Labor Ministry’s decision “represented yet another squandered opportunity.”
“A living wage is not only necessary for workers to live with dignity, but it is also essential for the sustainability of the garment industry. That is why leading international apparel brands have indicated their support for a fair living wage,” said IndustriALL general secretary Jyrki Raina.
In the midst of the fraught negotiations leading up to this week’s wage decision, some of the biggest brands currently sourcing from Cambodia promised to start paying more for their orders, to help factories bear the burden of any wage hike.
“We intend to hold the brands to their word and will continue working with them on a mechanism that will extend higher wages to workers in their supplier factories,” Mr. Raina said.
But the Garment Manufacturers Association in Cambodia (GMAC), which represents most of the country’s garment factories, says not enough of the international buyers have joined the pledge to make a difference. And after the Labor Ministry announced the new minimum wage on Wednesday, it warned that many of its members were now in serious danger of having to shut down.
One factory representative, Nang Sothy, said the new wage could force as many as 50 to pull out of Cambodia, taking at least 50,000 jobs with them.
The entire industry employs more than 600,000 people, most of them young women.
GMAC said that with the industry’s standard bonuses, the new minimum wage will push the base pay up to $145, on par with the highest minimum wage in Vietnam, where garment workers are much more productive.
In October, however, GMAC secretary-general Ken Loo said the wage to measure against in Vietnam was $149, making the absolute highest minimum wage Cambodia’s factories could bear $132—$4 above where the Labor Ministry has set it.
In either case, the unions that have been pushing for a new wage of $140 or higher said talk of mass closures was yet more than fearmongering from factories looking to protect their ample profits.
“Even if the wage rises to $200, these big factories will not close,” said Free Trade Union president Chea Mony. “Only the small factories running secretly without a license will close.”
Pav Sina, president of the Collective Union of Movement of Workers, dismissed GMAC’s warnings as an “excuse” to try and keep wages low.
As the only two independent union leaders on the LAC did Wednesday, both Mr. Mony and Mr. Sina said $128 was too low and that they would meet with their members in the coming days before deciding whether to accept the figure or call for strikes and protests to try and drive it further up.
Mr. Sina also said he worried that landlords around the factories would hike up their rents, along with the fees they charge for water and electricity once the new wage takes effect in January—as they do every time workers get a raise.
“$128 does not meet the needs of our workers,” he said. “We will ask our workers in the factories if it’s acceptable. If they don’t accept it, our union will decide what to do based on their request.”