With annual wage talks just around the corner, a joint group of independent and government-affiliated garment worker unions has informed the Ministry of Labour they plan to target a new minimum wage of about $180 for the Kingdom’s key export industry.
The new figure, which was identified in a letter delivered to the ministry on Friday, represents a nearly 30 per cent increase from the current $140, which includes an additional $5 mandated by Prime Minister Hun Sen after last year’s negotiations had concluded.
The letter sets the groundwork for a series of meetings to begin on Saturday between unions, the government and employer representatives, including the Garment Manufacturers Association in Cambodia (GMAC), to determine the 2017 minimum wage. The tripartite meetings will conclude in January.
“All of the unions now agree that the final figure that will be sent to the Ministry of Labour to begin negotiations is $179.60. This figure will be presented as the minimum wage for the garment and footwear industries,” confirmed Som Aun, president of the National Union Alliance Chamber of Cambodia (NACC).
The letter was signed by 17 unions, including the NACC, the Cambodian Confederation of Unions, and the Coalition of Cambodian Apparel Workers Democratic Union.
Union representatives say they settled on the final figure after carefully analysing the cost of living for workers and their families using data from a handful of independent researchers and government-issued economic criteria.
“We hope that all parties in the negotiations accept our figure, because this is what we came to after studying the cost of living for workers who need to support their families,” said National Trade Union Coalition president Far Saly. “This figure could ensure good living conditions in this society.”
In the lead-up to last year’s wage negotiations, garment workers settled on a very similar figure – $177 a month – as a starting point from which to launch discussions. But by the time September rolled around, the consensus had fallen apart, with a majority of unions supporting $158 and at least one independent union pushing for $178.
Unions were ultimately forced to settle for the substantially lower wage of $140.
But the new bid for $180 comes in the wake of an International Labour Organization report that determined Cambodia’s garment industry will need to either boost productivity or keep wages low if it is to maintain its competitive edge.
“At US$140 per month, the 2016 minimum wage is slightly higher than the estimated wage required to meet the poverty line,” the ILO determined.
Similarly, GMAC has long blamed high wages for factory closures, and recently said rising wages were responsible for about 70 factories closing in 2016 alone, a figure questioned by government officials and union leaders alike.
Still, some labour experts argue that workers are being unfairly blamed for the industry’s shortcomings. “Wages are only part of the overall production costs, and unions and workers are somehow blamed for making the industry less competitive,” said William Conklin, country director at the labour advocacy NGO Solidarity Center. “Cambodia has high energy rates and shipping costs, and until those are dealt with, that will make the industries less competitive.”
Employers often fail to invest in new equipment or train employees, both of which would help develop the manufacturing sector and boost its competitiveness, Conklin added.
Meanwhile, some argue the industry should alter entirely the way it determines wage hikes. Instead of revaluating the minimum wage each year, unions and managers should engage in effective bargaining year round, according to a new report released by the peer-reviewed International Journal of Economics this month. In any event, the report argues, Cambodia’s unions and garment sector employers need to change the way they work with one another.
“Unions and employers in Cambodia often do not have the knowledge or tools to engage in dialogue and dispute prevention measures including collective bargaining,” reads the report, written by researchers from Cambodia’s University of Technology.
The report also pointed to the large number of unions as one of the reasons behind their inability to effectively bargain.
“In the garment industry of Cambodia, where unionisation is estimated at 60%, the effectiveness of having so many unions is questionable, leaves many unions weak, under-funded, competing with one another and subject to corruption and political interference,” the report reads.
Still, ministry officials are optimistic the negotiations will lead to consensus. “The ministry hopes the negotiation process to increase the minimum wage for garment workers in 2017 will be good and that all of the parties will accept a figure that will help both workers and factory stability,” said Minister of Labour Ith Sam Heng.
GMAC could not be reached yesterday.