Logo of Phnom Penh Post newspaper Phnom Penh Post - PM urges factories to up wages

PM urges factories to up wages

PM urges factories to up wages

121213 04

People exit a passport office on Mao Tse Toung Boulevard in Phnom Penh earlier in 2012. Photograph: Hong Menea/Phnom Penh Post

 

As the lure of Thailand grows increasingly attractive for cash-strapped and under-employed Cambodians, Prime Minister Hun Sen yesterday made a public appeal for workers to stay in the country, simultaneously urging the Cambodian market to up its competitive edge.

In a speech at the inauguration of a new administrative building for the Ministry of Labour, Hun Sen admonished employers, and garment manufacturers in particular, to make the domestic market more attractive to workers, citing Cambodia’s ongoing labour shortage.

“I think that if [the garment industry] gave them higher wages, the workers would like going to work,” the prime minister said.

“And right now, the problem for the industry is competition to recruit workers.”

At times, the premier’s speech read like a lecture in basic supply-side economics.

“Don’t blame the government for not caring that [factories] are bankrupt,” he said.

“We cannot force the workers to work for you for a lower wage than others.”

Meanwhile, in neighbouring Thailand, despite looming mass deportations, more than 50,000 Cambodians have successfully registered as legal migrant workers, making themselves eligible for a recently instated 300 baht daily minimum wage – a salary that comes to just under $300 a month,

or more than three-and-a-half times the basic salary of a Cambodian garment worker including mandatory bonuses and allowances.

In his remarks, Hun Sen pointed to the availability of local jobs, saying workers don’t have “to be at risk” working overseas. That risk is very real, even for legal migrants, according to Andy Hall, a labour migration expert at Mahidol University in Thailand, but workers will continue to be drawn to Thailand unless Cambodia can offer work “to their people in industries that provide long-term and reliable jobs”.

“If [they’re legal migrants], they are frequently exploited by unregulated Thai and Cambodian agencies,” Hall said via email.

“If [illegal], they frequently fall prey to corrupt traffickers, smugglers and law  enforcement officials. If they are lucky and get a good job, they can earn more than they would in Cambodia, and hopefully this will more often be the case after the January 1st increase in the national minimum wage.”

Dave Welsh, country director for the American Center for International Labor Solidarity, said that the ongoing expansion of the garment industry in Cambodia had “definitely” created a domestic labour shortage, but at the same time, wages had remained low.

“The industry is booming,” he said. “The buyers in the EU and the market in the EU is expanding rapidly, so there’s definitely room for the brands to kick in more wages.”

Ken Loo, secretary-general of the factory representative the Garment Manufacturers Association of Cambodia, said he would be in favour of a measure that saw increased wages – but only if output would go up as well.

“We support that, as long as we get in return a corresponding increase in productivity... and most importantly, correspondingly, an increase in the price we get from the buyers,” Loo said.

“Demand [for labour] is higher than supply in Phnom Penh, so why haven’t prices risen to reach equilibrium?” Loo went on to ask, noting that factories had increased wages above the minimum wage until running into resistance from the brands they supply. “We don’t have the ability to go any further. Any more that we go, it’s a loss.”

Welsh acknowledged that, given the industry’s structure, local factories are “squeezed” by brands, making more “creative” options like nutrition plans for workers more beneficial in the Cambodian system.

Welsh also noted that while the Thai minimum wage is higher than that in Cambodia, it comes with unexpected costs.

“If [migration is] done legally, you’re paying hidden fees,” he said. “The cost of living [in Thailand] is a lot higher than it is in rural Cambodia. So it’s a bit of a red herring to say the pay is better because the wage is higher. And in the [Thai] garment sector, a lot of it is informalised, whereas in Cambodia, at least it’s formalised.”

Nonetheless, said Moeun Tola, head of the labour program at the Community Legal Education Center, “if there is still low pay, we cannot stop [workers from migrating], and the working conditions in this country are also a problem”.

Tola also highlighted hidden costs – specifically the high passport fees, which he characterised as “money under the table” – as a driver of illegal immigration, which compounds risks for migrant workers.

“Samdech [Hun Sen] only receives reports from his officials, but he doesn’t know his officials’ secrets that they’re trying to hide from him,” he said.

“We have evidence that if workers want to go to Thailand, they have to pay officials between $150 to $300, and when workers ask them why, they reply that it’s to make the passport.”

Yesterday, Hun Sen and Ministry of Labour officials vehemently denied that migrant workers paid any more than their official discounted rate for passports – about $24.

To contact the reporters on this story: Chhay Channyda at [email protected] ; Stuart White at [email protected]

With assistance from Mom Kunthear

MOST VIEWED

  • Ministry requests school opening

    The Ministry of Education, Youth and Sport on Thursday said it would request a decision from Prime Minister Hun Sen to allow a small number of schools to reopen next month. Ministry spokesman Ros Soveacha said if the request is granted, higher-standard schools will reopen

  • Kingdom eyes India FTA, China deal set for August

    Cambodia is studying the possibility of establishing a bilateral free trade agreement (FTA) with India to open a new market with the second-largest regional economy. This comes as an FTA with China is scheduled to be signed next month while similar negotiations with South Korea

  • Judge lands in court after crashing into alleged thief

    Sen Sok district police on Thursday sent a Koh Kong Provincial Court judge to the Phnom Penh Municipal Court on manslaughter charges after he crashed his car into a woman riding a motorbike on Wednesday, killing her. District police chief Hour Meng Vang told The

  • Preah Vihear court drops charges against villagers

    The Preah Vihear Provincial Court has dropped all charges against eight ethnic Kuoy villagers who were in a land dispute with the Hengfu Group Sugar Industry Co Ltd since 2014. Wednesday’s decision was made by the judge who tried the case on June 10. The eight

  • Gov’t to boost Siem Reap tourism

    The Ministry of Tourism released the results of an inter-ministerial committee meeting concerning Siem Reap province’s Tourism Development Master Plan for 2020-2035 on Wednesday, revealing the government’s plan to improve the overall tourist landscape there. The meeting was attended by Minister of Tourism

  • Residents ordered to remove structures on Phnom Penh’s canal

    Phnom Penh municipal governor Khuong Sreng has ordered authorities to act against the perpetrators who built houses along the Luo 5 canal in Meanchey district. The municipal administration plans to create a committee to solve the matter. The order was given on Wednesday while Sreng led

  • ‘On the offensive’: Cambodia to load up on loans to stimulate economy

    As the dust settles on the economy, Cambodia comes to grips with what needs to be done to turn the economy around, starting with a big shopping list for credit ‘We are going on the offensive,” Vongsey Vissoth, Ministry of Economy and Finance permanent secretary

  • Eighty replacement peacekeepers set for Mali mission despite Covid

    Eighty Cambodian blue helmet soldiers who completed the peacekeeping mission under the UN umbrella in Mali will return to Cambodia on Friday, said the Centre for Peacekeeping Forces spokeswoman Kosal Malida. “To protect their families and communities from the Covid-19 pandemic, the 80 are required to

  • Government set to make up for cancelled April holiday

    The government is set to make up for a five-day Khmer New Year holiday late this month or early next month. The holiday was earlier cancelled due to the onset of Covid-19. The announcement is expected on Friday as the government is studying a range

  • Families told to register for cash handouts

    The government has called on poor families to apply to commune authorities for evaluation to receive financial support during the Covid-19 crisis. A $300 million budget has been planned for implementation within a year. Ministry of Economy and Finance secretary of state Vongsey Visoth said this