PHNOM PENH – Cambodia yesterday raised the minimum monthly wage for workers in its key textiles and footwear industry by US$2 (RM8.38) to US$194 effective January next year, shy of the US$12 rise sought by major unions.
Factory wages have long been a tricky balancing act for the Cambodian government to keep costs competitive for investors and brands while satisfying influential unions representing 700,000 workers, which have held strikes in previous years.
Worth US$7 billion a year before the Covid-19 pandemic, the garment industry is the country’s largest employer and provides vital income for rural families, making apparel for brands including H&M, Adidas, Nike and Gap.
The new wage announced by the Labour Ministry will be a struggle to live on, Collective Union Movement of Workers president Pav Sina told reporters.
“I request all relevant stakeholders, the employers and the government to consider the possibilities of adding more to workers’ wage.”
Kaing Monika, deputy secretary-general of the Garment Manufacturers’ Association of Cambodia, told Reuters that the raise may be problematic, with operating costs also expected to rise.
“Even a US$2 increase will have a negative impact.”
Kaing Monika said employers will spend more on pension and healthcare contributions and workplace measures to counter Covid-19, including up to US$4 per head each month on tests.
As of April, garments and textiles were no longer Cambodia’s dominant export product, with agricultural and other new goods on the rise.
These include luggage, which is free of duties in the United States, according to the World Bank.
Cambodia’s export of travel goods to the US market was worth US$3.5 billion last year, up 3.6% from 2019.
This compares with US$2.6 billion to the European Union, a 35% contraction partly due to a partial withdrawal of preferential EU tariffs over human rights and political concerns. – Reuters, September 29, 2021
