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Cambodia: Garment Factory Owners Expect No Raise in Minimum Wage

Cambodia’s garment factory owners aren’t backing bigger paychecks for employees—the majority of Garment Manufacturers Association in Cambodia (GMAC) members have voted against any increase to their workers’ minimum wage next year.

Garment workers’ wages went up in January by 28 percent to $128 per month, and the rate for 2016, which is supposed to take effect at the start of next year, is under negotiation between the factories, unions and government officials.

Kaing Monika, GMAC deputy secretary-general told the Cambodia Daily the members were given three options to choose from: no raise, a raise between $1 and $5 and a raise between $6 and $10. He said, in a study conducted Sunday, 63 percent of factory owners voted for no raise and 26 percent voted for an increase between $1 and $5, however, votes are still being tallied.

If the results are the same once the counting is complete, the minimum wage will remain at $128 next year.

“It should be, because this is the voice of the majority of our members,” Kaing said. “We can’t go against the majority.”

He also noted the association would not sway from this decision, even if it means more of the union-led protests these negotiations were meant to quell.

“Whatever the results, we have to deal with that,” Kaing added.

The garment industry’s several unions have not yet agreed on a single number, but a small group has temporarily agreed to push for $177, which is the maximum of what a 2013 government study found the average garment worker needed at the time to make a living, according to the Cambodia Daily.

Some unions and labor rights groups have come together to conduct a new study and expect the results next month.

President of the Coalition of the Cambodian Apparel Workers’ Democratic Union, Ath Thorn told Cambodia Daily, GMAC’s strategy is to gradually raise its position, starting at zero, to keep the minimum wage as low as possible.

GMAC has warned that another big increase in the minimum wage could cause many of the industry’s investors and buyers to move to other locations, where wages are lower or workers are more productive.

However, a recent report conducted by the International Labor Organization, suggests that Cambodia’s garment factories have managed to absorb the 28 percent raise and has continued to see an increase in exports.

Thorn does not believe GMAC’s warning and thinks workers might start staging demonstrations over the minimum wage as they did last year if the rate stays the same.

A final decision by the Labor Ministry is expected in October.