Less than a week after unions unveiled their minimum wage goal for the coming year, the Kingdom’s factory owners have staked out their own – considerably lower – dollar figure for the coming negotiations.
The Garment Manufacturer’s Association in Cambodia (GMAC) yesterday submitted a letter to Minister of Labour Ith Sam Heng stating that workers in the garment and footwear industry should receive a minimum wage of $144.20 a month.
While the unions pointed to cost of living studies they said relied on government data in making their demand for $179.60, GMAC has pegged its proposal solely to the rate of inflation, which would not allow for an increase in real wages.
“We have only used the rate of inflation to calculate this number,” confirmed GMAC secretary-general Ken Loo, something he said reflected the struggling state of the sector.
The two proposals will serve as the jumping off point for tripartite negotiations between the government, labour unions and employer representatives that will determine the wage for 2017. Those meetings will begin over the weekend and last until January.
The $144.20 GMAC is proposing represents a 3 per cent increase from the current minimum wage of $140, in line with the inflation rate estimated by both the unions and GMAC.
“These days our garment sector is in a bad situation,” Loo wrote in the letter. “We worry about the decline in orders from buyers, in labour productivity, and in the export rates.”
Last month, GMAC’s operations manager Ly Tek Heng claimed rising wages had seen 70 factories shut down in Cambodia to that point in the year, a figure that was questioned by government figures and union leaders.
But labour experts say it’s problematic to factor in only inflation when wages are already low and many families rely on the minimum wage to survive.
“If the minimum wage were high enough, then it wouldn’t be so bad, but it’s not high enough", said William Conklin, country director at the labour advocacy NGO Solidarity Centre. “This is supposed to cover more than one person; it’s supposed to support families.”
Labour unions, meanwhile, appeared unconcerned with the number, which they say is just a starting point for negotiations.
“Every year, GMAC offers a low figure and claims that the situation is getting worse,” said Yang Sophorn, a representative of the Cambodian Alliance of Trade Unions (CATU). “But even if the factory closes, they always re-open it, and the minimum wage increases every year to ensure that workers can live.”