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Cambodia Garment Sector Gears Up for Wage Talks

Cambodian garment workers unhappy with this year’s minimum monthly wage increase from $128 to $140 are in with a shot of receiving another pay raise.

The Ministry of Labor released a statement Monday asking factory owners and unions to start preparing for the next round of negotiations, Cambodia Daily reported. The talks are scheduled to start in August, with final discussions between government, union and employer representatives pegged for October.

A new minimum wage is expected to come into effect on Jan. 1, 2017.

“All parties have to conduct surveys on social criteria (family status, rate of inflation and cost of living) and economic criteria (productivity, competiveness, the labor market situation and profit rate), as well as the poverty line, as a basis to discuss the minimum wage in Cambodia,” the statement said.

Tensions and tempers have been running high in Cambodia since last October, when the government announced a 9 percent increase that fell short of what labor unions demanded but was more than factory owners wanted to pay.

And it wasn’t the first time they disagreed: in 2014, after months of tense talks, the government increased the minimum wage from $100 to $128 per month, when unions had asked for $140. The monthly minimum has gone up each year since 2012, when it was $66.

Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia (GMAC), told Cambodia Daily that factory owners were struggling with the current $140 per month. “The industry is definitely not ready for a significant increase,” he said. “You already have so many instances of factory owners supposedly running away. So that is an indicator.”

Not surprisingly, labor leaders are looking for more.

“I think that if garment workers can get over $160, they can survive,” Sieng Sambath, president of the Worker Friendship Union Federation, said.

The garment industry makes up around 80 percent of Cambodia’s exports, mainly to the U.S. and the EU, and in 2015 was worth about $7 billion.