Prime Minister Hun Sen has decided to increase the minimum wage for garment industry workers by $2 per month for next year.
His decision came after the National Council for Minimum Wage agreed to keep the wage stagnant at $190 a month and proposed the figure to Minister of Labour and Vocational Training Ith Sam Heng for approval.
Speaking to reporters after the Thursday meeting, Sam Heng said the decision was attributed to serious difficulties and impacts caused by Covid-19 on global supply chains, production and imports of enterprises and factories.
“I reported the matter to Samdech Techo [Hun Sen]. He decided to add $2 to the minimum wage set by the national council. Hence, the minimum wage for workers in 2021 is $192 a month. Although we have difficulties, [we] have a positive outcome,” he said.
Sam Heng said employers and trade union sides consisting of 17 members each never seemed to be satisfied with the raise.
He was optimistic that the new minimum wage will help raise the living standards of workers and facilitate increased productivity.
“It is hoped factories and enterprises will have more competition with countries that export their products to the international market. The raise is also a message to attract more investment and new factories to Cambodia,” he said.
Sam Heng emphasised that the recent partial withdrawal of the EU’s Everything But Arms (EBA) scheme is not the main problem, as Covid-19 had swept all sectors.
Between 100 and 150 factories have so far suspended production amid the pandemic, leaving between 40,000 and 50,000 workers unemployed.
Employer representative Nang Sothy told The Post on Thursday that the $2 raise is still a challenge for employers.
“The raise could make it difficult to attract investors to our country. But I think this figure is not a major problem as employers can accept it. Employers abroad wanting new investments don’t carry much weight,” he said.
Cambodian Labour Confederation president Ath Thorn said negotiations on the minimum wage this year were more difficult than previous years because of Covid-19, the 20 per cent EBA withdrawal and a decline in global economic growth.
During the negotiation, he said the trade unions requested a $12 raise, while employer representatives instead wanted to lower the $190 minimum wage by $17. Both sides then agreed to leave it to the government to decide.
“We are not satisfied with this number because it is too little. But based on the current situation, it is difficult to demand more. If we want more it will take longer,” Thorn said.
Roth Nita, a 25-year-old worker in Kandal province, said she was satisfied with the raise although it is too little. She said it is better than wage cuts.
Her factory, she said, has suspended its production for more than a month and she had received some money from the government’s cash handout programme.
Workers also received other benefits in the deal such as travel expenses, a monthly $7 accommodation allowance, a monthly $10 remuneration for regular attendance, a 2,000 riel ($0.50) a day food allowance for overtime work, and a $2-$10 monthly remuneration for seniority payments when workers worked from the second to the 11th year.
In the end, each worker will be paid at least $209 to $220 a month.