Garment factory workers on their lunch break in Phnom Penh’s Russey Keo district in September 2022. Post Staff
Final negotiations on the minimum wage for 2025 in the garment, footwear and travel goods sectors are set for September 19, but a significant gap remains between the figures proposed by employers and workers' representatives.
In last week’s tripartite meeting, employers proposed a $2 increase to the current minimum wage of $204, while workers’ representatives suggested three different figures – $6, $7 and $10 – leading to proposed wages of $210, $211 and $214 for 2025.
Kang Monika, deputy secretary-general of the Textile, Apparel, Footwear and Travel Goods Association in Cambodia (TAFTAC), explained that the organisation is advocating for a cautious increase for several reasons.
“Firstly, our minimum wage is now higher than Vietnam’s, which has a larger and more developed economy. We are also far higher than Myanmar, Laos and India. Secondly, there’s a potential temporary shift of orders from countries in turmoil,” he said.
He also pointed out possible serious ramifications for sectors like tourism and hospitality, which have not yet fully recovered, stressing the need for a balance between a fixed wage and a market-driven wage that allows flexibility for employers with varying financial capacities.
“No country has a minimum wage higher than its average income or GDP per capita. Currently, Cambodia’s minimum wage is approximately 30 per cent higher than the average income or GDP per capita,” Monika added.
Fa Saly, president of the National Trade Union Coalition (NTUC), said he could not disclose the exact position on the figures being requested but emphasised that workers' demands were based on careful analysis of concrete factors.
“The unions focus on the welfare of the workers while also considering the common interests of employers and investors. As Cambodia competes with other countries, if our demands are too high, it could lead to lost opportunities and impact investment,” Saly remarked.
He pointed out that Cambodia’s wages are already higher than those in Myanmar, Bangladesh, Sri Lanka, Pakistan and Laos, and emphasised that his union would choose a reasonable figure for the September 19 negotiations.
Hong Vanak, an economics researcher at the Royal Academy of Cambodia, noted that the world is currently grappling with various crises, and Cambodia has not been immune to these challenges. He stressed that while both sides want wage increases, decisions must be grounded in practical considerations.
“The resolution must come through negotiations so that both sides are satisfied,” he added.
Vanak highlighted that employers often face limited purchase orders, meaning production cannot always exceed demand. Meanwhile, he said workers are dealing with rising living costs, debt from banks or microfinance institutions and societal pressures that push them to work harder.
“Wage increases are an important motivation for workers to feel content, but they must be within a reasonable limit, reflecting the current state of commodity prices and societal growth,” Vanak explained.
He also noted that wage hikes could positively influence countries placing orders, such as EU nations and the US.
“They will appreciate seeing the Cambodian government prioritise the well-being and livelihoods of workers. When buyers are satisfied, they may increase their orders. Even though we face challenges, wage increases and benefits for workers can showcase Cambodia's positive aspects to purchasing countries,” he said.
Vanak acknowledged the government’s ongoing social support programmes, such as assistance for pregnant workers and children under two, along with an additional $2 on top of whatever amount is agreed upon between employers and workers.
However, he cautioned workers against pushing for excessive wage increases that employers may not be able to afford, as this could lead to factory closures, resulting in losses for both sides.
