Cambodias garment workers will receive a minimum of $170 from January 2018

Cambodia's garment workers will receive a minimum of $170 from January 2018

Cambodia's garment, textile and footwear workers are to receive an 11% rise in minimum monthly wages from the beginning of next year.

Wages for the sector, which generates US$7bn annually for Cambodia's economy, will increase to $170 from January 2018, the Ministry of Labor and Vocational Training said yesterday (5 October). The move comes just ten months before the country's general elections and attempts to win the votes of Cambodia's 800,000 garment workers, and builds on the current minimum wage of $153 per month.

The new wage is above the Ministry of Labour's suggestion of $162.67 and the Garment Manufacturers Association in Cambodia's (GMAC) proposed $161, and has been met with a mixed reaction among unions and the industry.

Pav Sina, president of the Collective Union of Movement of Workers, welcomed the rise but told local press that it wasn't enough.

"US$170 is not enough for a decent living yet. However, it is a good start for this year to increase the minimum wage to this level plus other benefits offered to workers which are paid by employers. I think more work still needs to be done on improving working conditions at factories."

In August, Cambodia's Prime Minister Hun Sen promised garment factory workers they would receive free health-care from their employers, free access to public transport and a jump in the minimum wage to at least $168 per month at the start of next year.

Meanwhile, Kaing Monika, deputy secretary general for GMAC, told Reuters the new wage was "beyond the affordability of some of our members and the competitive level of the country."

Wages in Cambodia remain low by international standards, primarily because of pressures to compete with other low-cost production countries such as Bangladesh and Vietnam.

The minimum wage in Cambodia, an important low cost clothing manufacturing centre, is reviewed annually based on seven criteria set out by the International Labour Organization (ILO), taking account of the basic living needs of families, the inflation rate (currently about 2.3%), the general cost of living, productivity, economic competitiveness, the labour market situation, and the profitability of the sectors covered by the minimum wage rate.

The ILO has often faulted low labour productivity in Cambodia's garment sector as a barrier to increasing wages. It has insisted on the need to link wage increases to productivity improvements to make them more sustainable.

Where next for minimum wages in Cambodia and Vietnam?

In 2015, the Southeast Asian country's apparel exports reached nearly $6bn, with the US its largest market. Around 800,000 people work in Cambodia's 700-plus garment and shoe factories.