Cambodia Begins Minimum Wage Talks for 800,000 Garment Workers
Cambodia is kicking off negotiations over next year’s minimum wage for the garment, footwear and travel goods industry, though discussions are still in their earliest stage.
“The meeting heard the positions of the representatives of each party on the change in social and economic criteria,” the National Council on Minimum Wage said in a statement on Wednesday. “However, the employers’ representatives and the workers’ representatives have not yet been able to confirm their official position figures, requesting more of their internal meetings.”
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Labor and vocational minister Ith Samheng, who attended the inaugural confab, told reporters afterward that the government will be following discussions closely.
Cambodia’s minimum wage currently stands at $200 a month after increasing from the previous floor of $194 in 2022.
Other meetings have been set for Aug. 28 and Sept. 4, 11, 18 and 25 at the Ministry of Labour and Vocational Training.
The garment, footwear and travel goods sector is the country’s largest foreign currency earner. As high inflation continues to bite into consumer spending, however, the value of shipments for the first seven months of the year has fallen by roughly 20 percent from $7.9 billion to $6.3 billion, according to trade data from the General Department of Customs and Excise.
At a business forum last week, Kong Sang, president of the Textile, Apparel, Footwear and Travel Goods Association in Cambodia, blamed the global cost-of-living crisis for the decline in orders. Some buyers, he said, have chosen to divert their production to Bangladesh, where costs are lower.
“With a high wage compared to garment-producing countries, the skill of workers needs to be addressed to improve Cambodia’s competitiveness of garment products in the market,” he said.
Ken Loo, secretary general of the Textile, Apparel, Footwear & Travel Goods Association in Cambodia, has also fingered the economic consequences of Russia’s war on Ukraine as a reason for the slump, which he expects to persist all through 2023.
Still, Ath Thon, president of the Cambodian Labor Confederation, told the Khmer Times that he has high hopes for a meaningful hike considering the importance of the sector to the Cambodian economy.
“An increase in the minimum wage for 2024 will be possible as Cambodia still has export potential and local wages are not yet higher than others in the region,” he said.
Cambodia houses 1,077 factories and employs some 800,000 workers, most of them women, according to the Ministry of Labour and Vocational Training.
The Industry We Want, a multistakeholder initiative helmed by the Ethical Trading Initiative and the Fair Wear Foundation, estimates that garment workers in Cambodia face a 62 percent gap between minimum and living wages, higher than the 45 percent global average but lower than the 74 percent seen in Bangladesh.
