Minimum Wage Set To Rise to $61 This Year

The Labor Advisory Committee yesterday agreed to increase the minimum wage for garment workers to $61 per month–a far lower figure than the $93 unions were calling for.

During a meeting at the Labor Ministry, 20 out of 25 LAC members present voted to raise the minimum wage by $5 and incorporate into the figure an existing $6 living allowance, which workers have received since 2008. The $11 increase will also apply to factory interns’ wages, which will rise from $45 to $56.

The Ministry of Social Affairs released a statement in June announcing the government’s support for this plan.

The increase will be implemented in October, and will remain in force until the next LAC meeting on the minimum wage, which is scheduled for 2014, according to Vong Sauth, Minister of Labor and chairman of the LAC, a policymaking body comprising representatives from the government, labor unions and the Garment Manufacturers’ Association in Cambodia.

Union leaders reacted defiantly to the decision. Speaking after the meeting, president of the Coalition of Cambodian Apparel Workers Democratic Union Ath Thon said the increase was nowhere near enough.

“This $5 [increase] does not respond to the needs of the workers; it is a very small amount,” he said. Mr Thon, who did not vote for the $61 minimum wage, added that he would call a union meeting soon to discuss possible repercussions.

“We did not agree to this decision, and we will keep on making our demands,” he added. “If our workers disagree with this decision, we will demonstrate or strike.”

Mr Thon also called for the minimum wage to be assessed every year, instead of waiting until the next LAC meeting in 2014.

Free Trade Union leader Chea Mony said yesterday that he did not want to comment on the meeting because he had not been invited, but he insisted that a three-day strike planned for July 13 to 15 will go ahead.

“Our work stoppages will still go on, because I have not received any response,” he said. On May 23 the FTU, which claims to represent about 86,000 workers, voted to strike if the LAC failed to approve at least a $20 increase.

On Monday 20 unions, including CCAWDU, presented a joint statement to the government and GMAC calling for a $93 minimum wage.

However GMAC president Van Sou Ieng said this morning that this figure was far higher than the minimum amount necessary to meet living costs.

Mean Sophea, the Commerce Ministry representative at the LAC, said he approved of the $61 wage. He suggested that further increases could drive potential investors to Vietnam, where he claimed worker productivity is higher while the minimum wage is still $70.

“If we raised the minimum wage [to $93], it would be like pushing investors out of our country,” he said, adding that overheads such as electricity and transportation costs in Cambodia were much higher than in Vietnam.

Moeun Tola, head of the labor rights program at the Community Legal Education Center, said he thought a minimum wage of between $72 and $74 would allow workers to meet their living costs.

“The new…raise does not help anything. The living standard of garment workers is just the same,” he said, adding he did not think an increase to around $72 would drive away investment, because Cambodian factories were far more profitable than their Vietnamese counterparts. Productivity is also increasing in Cambodia, he said, citing data from a report released by the Cambodian Institute for Development Study in September 2009.

The study found that worker productivity in Cambodia increased from $235 per month in 2004 to $283.94 per month last year, while real wages dropped during the same period.

As the meeting drew to a close, LAC chairman Mr South warned union leaders to accept the committee’s decision, whether they agreed with it or not.

“We have to implement this based on the law, and if anyone does not follow the law, we will let the law take its course,” he said.

Mr Tola pointed out that unions could voice their disapproval without breaking the law.

“There is no law to prohibit them from striking,” he said.

 

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