Following an at-times turbulent process, Cambodia yesterday set the 2016 minimum wage for garment workers at $140 per month, a $12 increase from the current rate of $128 but well below union demands for $160.
Labour Minister Ith Samheng announced yesterday that the government’s wage-setting group, the Labour Advisory Committee, first voted on increasing the wage to $135, after which Prime Minister Hun Sen mandated an additional $5, as he did last year.
“I think everyone can enjoy this figure,” said Samheng. “I see that from one year to another, our negotiations get better and smoother.”
The 28-member LAC, 14 from the government and the other 14 equally split between unions and employers, overwhelmingly voted for the government figure of $135 submitted by a tripartite working group on Wednesday night.
The unions’ submission of $160 received just two votes, while no votes were recorded for the employers’ figure of $133. Two voters abstained.
The announcement of the final $140 rate, far less than union demands, angered some. Ath Thorn, president of the Coalition of Cambodian Apparel Workers Democratic Union, said he would begin talks with other unions to potentially hold mass strikes after the Pchum Ben holiday. “I cannot accept this figure. I need $160. I expect that there are between 50 to 60 per cent of workers who will not accept this figure,” he said.
Thorn, the head of Cambodia’s largest independent union, said the results of the LAC’s vote yesterday showed that some unions were cooperating with the government.
“Some unions are not independent and did not bring justice to workers, because only two unions voted for their own figure, while the other five voted for the [government’s] figure,” he said.
The influence of pro-government unions was the reason Thorn and three other independent unions walked out on Wednesday night from the tripartite working group’s vote on figures to submit to the LAC.
As for employers, Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said businesses would comply with the new wage, although he warned that unless other factors in the industry improved, such as productivity, more brands would leave the country for cheaper alternatives.
“I hope we can try to recover this increased cost if buyers increase prices, but I know from past experience that buyers won’t increase prices,” he told reporters yesterday.
Employers had grumbles about the process as well.
Loo said the LAC’s decision to consider all three figures submitted by the tripartite working group on Wednesday night, even though the unions’ figure received the least votes due to the walkout, made the working group’s eight days of discussions seem irrelevant.
“The technical working group agreed that the two highest numbers would be submitted to the LAC, not all three numbers,” he said. “Then I have to question: what is the use of the technical working group?”
Although employers have long said buyers would be averse to paying higher prices in the wake of minimum wage increases, one major buyer of Cambodian garments, Sweden-based H&M, said yesterday that it felt “positive” toward the result.
“We support higher wages for garment workers and are positive to the recent raise,” a spokesperson said.
“This is now the second year of annual revision, and we welcome the predictability this gives all involved and enables suppliers to calculate the wage raise in their price to us for next year’s production.”
The International Labour Organization also praised Cambodia yesterday, acknowledging “the genuine efforts by all parties to reach a tripartite consensus” in a press statement.
However, William Conklin, country director of the US-based Solidarity Center, said a genuine consensus was not reached, with the ultimate wage-setting power lying in the hands of the government-leaning LAC and the premier.
“One hundred sixty dollars never stood a chance, really,” he said.
Conklin added that $140 was not a substantial increase but nevertheless a “needed” one. He warned, however, that price increases for food and lodging in areas next to garment factories would also follow.