Higher wages help calm Cambodia factory strike
Days before the beginning of the year, when Cambodia increased the minimum wage to US$128 per month, hundreds of employees at a South Korean-owned garment factory rallied in front of Seoul's embassy, calling for an intervention in their dispute with factory management.
The Cambo Kotop garment factory had fired five union representatives, amid a strike by 1,200 employees.
Whereas the new minimum wage prevented the protests from gaining intensity, garment factories struggle with shrinking margins.
"This particular incidents seems nothing compared to the garment sector protests of early last year [that resulted in the deaths of four people and dozens of injuries and arrests]," said Filipe Berger, Phnom Penh-based associate with Emerging Markets Consulting, a consultancy and investor in Cambodia, Myanmar, and Lao PDR.
"The minimum wage was increased not long ago and even the International Labour Organization (ILO) has said that it is now time for the buyers to start paying more to support the wage increases," he added. The ILO warns that the new minimum wage will raise factory owners' labour costs by approximately 18.7%.
"It is important that all sides work together to ensure Cambodia's garment industry remains economically viable," said Maurizio Bussi, the ILO's country director for Thailand, Cambodia and Lao PDR.
He added that they "have received encouraging signals that key buyers will...reflect the new minimum wage in higher FOB prices ('Free on Board' or export prices excluding shipping charges) for 2015."
However, as reported on just-style yesterday (8 January), the number of working days lost by strikes in Cambodia's garment industry last year fell 40% on 2013.
Help test our new apparel sourcing tool.
- Digitalisation and data to disrupt supply chains
- EU eyes mandatory due diligence for apparel supply
- Unlocks for the future fashion sourcing landscape
- What TTIP might mean for US, EU textiles & apparel
- Geo-political uncertainty and how to survive it
- Li & Fung forms supply chain partnership with PVH
- US Q4 in brief – Finish Line, Oxford Industries
- Big data to help US firms improve clothing fit
- Levi Strauss and ILO probe Cambodia factory death
- Sustainable fashion app to help shopping decisions
- Central and East Europe Report Package
- Central America strategic sourcing review - a focus on Guatemala, El Salvador and Honduras
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- REPORT BUNDLE: Africa-Med, Southeast Asia and Central America strategic sourcing pack
- When Things Go Wrong - A Practical Guide to Managing Common Problems in Apparel Sourcing