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Brands Prepared to Pay for Higher Wages in Cambodia

Global fashion brands and retailers recently told the Cambodian government they are willing to accommodate a minimum wage increase.

Garment unions want to increase the minimum wage in Cambodia from $100 to $160 per month. On Monday, eight international brands including Puma, Levi Strauss & Co and H&M, met with IndustriALL Global Union and Cambodian government officials in Phnom Penh to discuss the future of the country’s garment industry.

According to IndustriALL general secretary Jyrki Raina, “For the first time global brands have acknowledged that they are prepared to cost in the price of higher salaries in Cambodia. The ball is now in the court of the government and factory owners to get round the table and agree on a new wage setting mechanism.”

Shortly after the meeting, Levi’s announced it would slash its orders from Cambodia by 50 percent. In a statement, Levi spokeswoman Amber McCasland said, “Levi Strauss & Co. supports the Cambodian government establishing a methodologically sound and inclusive process for determining the minimum wage to ensure stability in the industry.” The company added it hoped an announcement regarding a new minimum wage would come as soon as possible.

“In addition, political stability and respect for human and worker rights are essential to maintaining LS&Co.’s sourcing in Cambodia, and anywhere we source. Thus, we share the Cambodian government’s interest in a peaceful, constructive way forward on the issues at the root of current labor unrest. We reduced our sourcing in Cambodia to minimize supply-chain risk and ensure delivery. We hope to see to swift progress on the outstanding labor and human rights concerns,” a Levi’s spokesperson stated.

In an email response to German broadcaster Deutsche Welle, a spokesperson for H&M confirmed that the company had taken part in this week’s talks. The company would not comment on the meetings, but did say it was keen to continue sourcing from Cambodia.

“It is in the Cambodian textile industry’s [interest] as well as in H&M’s interest that the industry continues to develop to an advanced and mature textile industry,” the spokesperson said. “We are dependent on stable markets in which people are treated with respect.”