In the first round of bilateral negotiations on Wednesday between factory owners and unions to determine a new minimum wage for the garment sector—the largest private employer in Cambodia—neither side budged on their initial proposals.
The Garment Manufacturers Association in Cambodia (GMAC), which has proposed a $4.20 increase to the current monthly minimum wage of $140, said the industry should actually consider lowering the wage in order to keep the sector afloat. Unions have entered talks united around a figure of $179.60.
“This morning, our unions did not agree because it was too low,” Pav Sina, head of the Collective Union of Movement of Workers, said of the $146.37 figure that was discussed during the meeting.
“The employers raised only two points: inflation and productivity. But there are three or four more points that we still have to negotiate, such as expenditures of workers and competition,” he added.
Mr. Sina said the unions had agreed to decrease their asking price in preparation for a follow-up discussion today, but declined to provide an exact figure.
“The figure of $179.60…is up for negotiation. It is not an absolute number,” he said, adding, however, that “even frugal workers need at least $171 per month.”
Som Aun, a prominent government-aligned union leader, said he was optimistic that employers would also be flexible.
“We think the employers have not yet shown their final plan,” he said. “We hope they will continue increasing the wage of the workers.”
In a meeting on Friday, the Labor Ministry proposed a wage of $148.19, taking into account “economic and societal factors.” Ministry officials could not be reached for comment on Wednesday.
GMAC Secretary-General Ken Loo said factories would comply with whatever the government decided—“because it’s the law”—but that the industry, which employs more than 600,000 Cambodians and exported more than $6 billion in goods last year, was already struggling to compete.
“What the industry can afford—I’m telling you that even at $140, it’s not sustainable,” he said. “From a competitive standpoint, we should be reducing the minimum wage.”
According to the International Labor Organization, productivity per worker has been falling in the country’s garment sector due to rising input costs combined with dormant prices paid by overseas buyers.
The minimum wage has more than doubled over the past three years, but unions say it has still not caught up with living costs after nearly two decades of stagnation.
(Additional reporting by Janelle Retka)
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