In response to increasingly contentious demonstrations over the new minimum wage, Cambodia’s government has responded with an unusual combination of capitulation and defiance, raising its original wage proposal and threatening action if the protests continue.
Originally, the Labour Advisory Committee reported a $15 increase in monthly wages, effective April 1, 2014. Under the newly accepted plan, the minimum wage will rise incrementally over the next five years, lifting it from its current $80 per month to more than $160 per month. In 2015, the monthly minimum wage is set to increase again by $15, then by $16 in 2016, $17 in 2017 and, finally, $17 in 2018.
However, the streets flooded with unassuaged factory workers, irate over what they considered to be a miserly increase. Tens of thousands of workers launched an organized march on December 24, shutting down factory production, halting transportation. In an attempt to placate the demonstrators, the Cambodian government offered to raise the wages by an additional 25 percent to $100 per month, effective sometime in February, instead of the original proposal of $95 per month.
The Cambodian government also followed its carrot with a stick, warning demonstrators to relent or suffer legal action. Ken Loo, Secretary General of the Garment Manufacturers Association in Cambodia, said, “We are asking the unions to respect the law.”
Labor activists, though, remain unimpressed. Pav Sina, president of the Collective Union of Movement of Workers, said, “Workers will continue with their protests because the new increase isn’t much different from the previous offer. We call on the government to find more mechanisms to increase workers’ wages to a suitable level.”
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Last March, the minimum wage was increased to $80 per month from $61 but that move stoked rather than dampened workers’ frustration with what they consider to be punishingly low salaries. Cambodia has also suffered intense criticism for its labor conditions and factory safety, and lack of accordance with social compliance in general. Last month, Better Factories for Cambodia (BFC), an auditing organization sponsored by the United Nations, announced a new, aggressive initiative to publicly list the factories that fail to meet their stringent requirements for safety.
The stakes for Cambodia are high as it becomes progressively more reliant upon its burgeoning garment industry. In the first eleven months of 2013, it earned $5.1 billion exporting garments, a 22 percent increase over last year. The industry employs more than 300,000 workers, more than 90 percent of them female. Foreign investment has recently poured into Cambodia from Australia, England, India, Japan, Korea, Malaysia, Singapore, China, Taiwan and the U.S. China alone sent the nation $121 million in 2013.