Cambodia Sets Minimum Wage Below Union Demands

Cambodia Raises Minimum Wage to $128 a Month; Unions Demanded at Least $140

Cambodian garment workers travel home by truck in Phnom Penh. European Pressphoto Agency

Wall Street Journal | 12 Nov. 2014 

Cambodia on Wednesday increased the monthly minimum wage for garment workers by 28% to $128, falling short of union workers’ demands and creating the potential for further strikes in the country.

In September, authorities deployed troops in Phnom Penh as workers rallied to demand higher wages in the industry, contributing to a near yearlong standoff between Prime Minister Hun Sen and his increasingly vocal opponents. Four people were killed in labor protests in January.

Anticipation of further protests had grown ahead of Wednesday’s wage decision, with union leaders declaring that anything short of $140 a month was unacceptable. The textiles industry is an important part of Cambodia’s economy, providing some 500,000 jobs and accounting for a large percentage of the country’s exports.

The government, though, has been reluctant to meet the unions’ demands, worrying that sharp wage rises may encourage factories to relocate. Cambodian workers earn some of the lowest wages in the world, with a state-defined poverty level of $120 a month. The Labor Ministry’s wage committee voted to raise salaries to $128 for full-time workers and $123 for workers on probation, effective Jan. 1.

Ath Thun, president of the Coalition of Cambodian Apparel Workers’ Democratic Union, said the wage increase was too little. “We need $140. We will protest more to demand the wage,” he said in an interview.

Meanwhile, the International Labor Organization on Wednesday called on international garments brands to stick with Cambodian suppliers, who have faced stagnating or falling prices in some of major export markets.