A week after Cambodia’s Labor Advisory Committee (LAC) received a letter threatening mass protests if demands for a $178-a-month minimum wage were not met, the country’s garment unions have finally settled on a pay-raise proposal.
Leaders from 14 independent and government-backed trade unions, representing more than 700,000 garment workers in Cambodia, on Tuesday agreed to petition that the sector’s monthly minimum wage be increased from $128 to $168 in 2016.
“Some of our unions used to demand different figures, such as $158, $166 and $178, but today we decided to take only one figure for negotiation with employers coordinated by the government,” Fa Saly, president of the National Trade Union Confederation, told The Phnom Penh Post.
But Ken Loo, secretary general of the Garment Manufacturers Association in Cambodia (GMAC), said that low productivity levels have so far failed to prove to employers that there is a “solid economic rationale” for a pay increase.
Furthermore, factory owners are worried that raising the minimum wage will cause clothing giants to take their business to other low-cost countries.
Nonetheless, the tripartite committee—comprising union, factory owner and government representatives—is expected to present its proposal to the Labor Ministry next week.
Accounting for 80 percent of Cambodia’s exports, textile and garment manufacturing is worth more than $5 billion annually and a number of major apparel companies, such as H&M, Inditex and Primark, have recently come out in favor of paying the country’s garment workers a living wage.
“Industry-wide collective bargaining takes wages out of competition, which means supplier factories can’t push down wages to win business,” said Jenny Holdcroft, policy director of IndustriAll, which has chosen Cambodia as the garment-producing country in which to start its ACT initiative.
“Support of the brands through their purchasing practices will mean that factories will be able to pay workers more, while improved working conditions, productivity and efficiency can also be covered in an industry-wide agreement,” she added.