The garment sector’s minimum wage will be increased to $192 starting next year, even as hundreds of factories have suspended operations and an estimated 150,000 workers lost their jobs.
The Labor Ministry announced the increase on Thursday, saying negotiations between the ministry, industry and unions led to an unchanged minimum wage of $190, and Prime Minister Hun Sen had “added” $2 on top — what amounts to an annual “gift” from the government.
Cambodian Labor Confederation president Ath Thorn said unions had pushed for a $12.35 increase, or 6.5 percent; employers sought a decrease of $17.39, about 9.2 percent; and the government suggested a $5 drop.
“We are not satisfied, but we have to consider the Covid situation,” Thorn said.
Cambodia’s garment industry is struggling due to lowered demand worldwide as a result of the coronavirus pandemic.
Thorn also pointed to the partial loss of “Everything But Arms” trade privileges to the E.U. due to human rights concerns.
Nang Sothy, who represented the Garment Manufacturers Association in Cambodia at Thursday’s meeting, said factories would struggle without wage reductions. The pandemic had hit production chains, exports and capital flows, he said.
“It’s difficult now,” Sothy said. “There is nothing big [happening] in terms of investments.”
Labor Minister Ith Sam Heng told reporters that the new wage level tried to balance workers’ livelihoods against the industry’s competitiveness.
“I hope this wage will help the livelihoods of workers who are facing difficulties, and will help increase work productivity, and do whatever it takes to make our factories more competitive with foreign countries,” Sam Heng said. “It is also a signal to attract more investment, to create new factories in Cambodia.”
According to the manufacturers association, more than 150,000 jobs had been lost as 400 factories suspended production as of July.