Wage increase sewn up

Garment workers exit a factory at the end of an overtime shift on the outskirts of Phnom Penh. 

Photograph: Will Baxter/Phnom Penh Post

Garment and footwear workers will be paid a government-mandated minimum wage of $75 per month – an increase of $14 – beginning in May, the Ministry of Social Affairs announced yesterday.

The increase, which ministry officials had agreed should be $12, was boosted by $2 after direct intervention from Prime Minister Hun Sen –  but it still wasn’t enough to appease non-government-aligned unions, which threatened to strike, saying an extra $14 would do little to lift workers out of poverty.

“The minimum wage will be changed on May 1 and the workers will receive it at the end of May or early in June,” a statement signed by Minister of Social Affairs Ith Sam Heng said. “The Labour Advisory Committee will hold a meeting on March 29 in order to complete this process in accordance with the Labour Law.”

According to the document, which spoke of an $80 minimum wage – because it included a $5 health bonus that workers already receive – Hun Sen had ordered employers to add the additional $2.

This was verified by Vong Sovann, deputy secretary-general of the Ministry of Social Affairs’ strike resolution committee.

“The decision is final and relevant parties will have a meeting next Friday with the Labour Advisory Committee,” he said.

The government also agreed to create a working group involving representatives from the Garment Manufacturers Association in Cambodia (GMAC), ministries and unions to annually assess the minimum wage, the ministry’s statement said.

The timing of the announcement, which followed a series of deadlocked minimum wage negotiations between GMAC and unions in the past month, was a shock to both sides of the industry.

“We’re surprised. We found out this morning,” said Ken Loo, secretary-general of GMAC, which had held firm on a $70 offer to unions during recent talks. “It’s not a question of whether our members will struggle [to pay this] – it’s a question of how many will struggle.”

Rong Chhun, president of the Cambodian Confederation of Unions, one of the unions that refused to go below $100 – while government-aligned unions agreed on $73 – said he and four other union confederations could not accept $75 and would organise a massive strike “as soon as possible”.

“I do not welcome this decision at all because it is a very little amount for workers,” he said, adding the government’s packaging of an “$80 minimum wage” was misleading.  

A statement from the five unions, including the Free Trade Union and the Coalition of Cambodian Apparel Workers’ Democratic Union, said they would continue fighting.

“Increasing wages is vital to reducing risks of fainting and strikes. We will not abandon our demands until $100 per month is paid.”

The prime minister’s involvement in securing an extra $2 – spelled out in the ministry’s statement – was an example of parties using the minimum wage issue to seek votes ahead of July’s National Election, Koul Panha, executive director of election monitoring organisation Comfrel, said.

“Every party has been trying to work on land reform, and now it’s minimum wage too,” Panha said. “The opposition, for instance, is trying to attract more government employees through its minimum wage [draft law], so maybe the ruling party is now trying to improve conditions.”

SRP lawmaker Son Chhay defended his party’s push for a $150 minimum wage for garment workers, telling the Post yesterday it was realistic, especially if the government stamped out rampant corruption in the industry.

“Factories have explained the costs of setting up in Cambodia – they have to pay bribes to so many ministries and authorities,” he said, adding that such under-the-table expenses often amounted to double the cost of proposed wage increases.

“This [raise to $75] shows there is always room for an increase . . . but if the government is really serious about taking care of garment workers, they have to pass a law [guaranteeing wage rises], not just make small increases before an election,” he said.

The Kingdom’s billion-dollar industry employs more than 400,000 workers in hundreds of factories and sells most of its exports to the US and Europe.

According to ILO figures, the minimum wage in the garment industry was $45 a month in 2000, $50 in 2007 and $61 in 2010. Standard bonuses and allowances have increased from $5 to $22 since 2000.

Dave Welsh, American Center for International Labor Solidarity country manager, whose organisation has supported unions in their push for at least $100, said $75 was much lower than a living wage, but the government’s commitment to annual reviews was a positive sign.

“We’ve been strongly recommending something systematic to adjust with inflation and rising costs of living. [Wage increases] should not be reviewed on an ad hoc basis,” he said.

Food and rent prices around factories often went up with wages, and other incentives, such as food programs, were needed, he added.

Furthermore, because many brands were in Cambodia to show they supported a clean industry, they needed to put “their money where their mouth is” on a living wage, Welsh said.

Such a move would be welcomed by Chhem Sam On, a worker at Xing Chang Xing garment in Phnom Penh’s Russey Keo district, who said the $14 increase would not free workers from the poverty they endured.

“The cost of rent, electricity and water will increase when they know we’re getting a higher wage,” she said. “If the government thinks this is enough to support our living standards, it’s wrong. We need at least $90 to $100.”