Garment and footwear workers in Cambodia will see monthly wages increase by 7% to US$182 from the beginning of next year, according to an announcement from the Ministry of Labour and Vocational Training.
The move will mean workers in a probationary period will receive US$177 until the probationary period is complete, after which their wage rises to US$182.
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The minimum wage change is effective from January 2019, and marks an increase from the current level of US$170, which came into force in January this year.
According to the International Labour Organization’s Cambodian Garment and Footwear Sector Bulletin report, far from weighing on employers’ ability to pay overtime, an increase in the base wage appears to go hand-in-hand with longer working hours.
The ILO also noted that Cambodia’s garment and footwear exports rose 9.5% to US$8m in 2017. The garment and footwear sector remains the most important component of Cambodia’s exports, accounting for 72% of the country’s total merchandise exports for 2017.
The EU continues to be the most important market, absorbing 46% of the sector’s exports in 2017. The US maintained its position as the second most important destination, taking in 24% of the sector’s exports in 2017, roughly the same share as the year before.
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By GlobalDataHowever, a cloud hanging over the sector is a decision last week by the EU to begin the process of withdrawing Cambodia’s eligibility for duty-free trade access under the Everything But Arms (EBA) programme. The moves is in response to what it describes as “recent worrying human rights and labour rights developments” in the country.
