Amid calls for the government to raise Cambodian garment workers’ minimum monthly wage to $160, Prime Minister Hun Sen yesterday said that wages garment workers earn fall in line with regional standards.
In a speech at a groundbreaking ceremony for a bridge project in Kandal province yesterday, the premier asserted that garment workers in neighbouring countries and Cambodian workers in other industries earn less than Cambodian apparel workers, and garment factories cannot afford the increase unions demand.
“I asked the Vietnamese Prime Minister about the minimum wage of garment workers in Vietnam; he said they get more than $100 per month,” Hun Sen said. “If [we] compare this to our increase to $100, it’s nearly the same as Vietnam, but higher than India, Bangladesh, Myanmar and Laos.”
Hun Sen added that garment factories could not afford a sudden jump to $160 from last year’s minimum wage decree of $80, which includes a $5 health bonus.
But the annual revenue raked in by the relatively few garment factories seems to contradict factory owners’ insistence that higher minimum wages would devastate their bottom lines, said Dave Welsh, country director for labour rights group Solidarity Center.
“It’s a $5.5 billion industry with just over 500 factories,” Welsh said yesterday.
However, the $5.5 billion figure can be misleading, said Ken Loo, secretary general of the Garment Manufacturers Association in Cambodia (GMAC). The total annual export value of products produced by Cambodian garment factories is about $5.5 billion, but factories do not necessarily see that much in profits.
GMAC has publicly scoffed at Ministry of Labour plans to raise the minimum wage to $160 by 2018, even trying to urge the ministry to raise wages only to $130 over five years a day after the ministry working group outlined its plan.
Loo and factory owners have pointed out that most factory workers earn more than minimum wage, after bonuses and overtime. But Welsh said workers generally earn extra money from working excessive overtime hours nearly every day.
Nam-Shik Kang, owner of Injae Garment Co Ltd, said in an email yesterday that the wage hike would cost his factory $500,000 each month. The factory earns only about $100,000 in annual profits,
In spite of Hun Sen’s assertion yesterday, workers remain firm in their wage demand, Pav Sina, president of the Collective Union of Movement of Workers, said.
“Our demand is based on the cost of living,” Sina said. “We based our demand on the [Labour Ministry working group’s] research.”