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Cambodia to Raise Minimum Wage Nearly 10% for Garment Workers

Continuing the upward labor cost trajectory, Cambodia is set to raise its minimum wage for garment workers again.

Cambodia’s Ministry of Labor and Vocational Training said in a statement Thursday that it would raise the minimum wage for clothing and footwear workers in the country to $153 a month starting at the beginning of next year, the Associated Press reported.

The 9.2% increase follows last year’s 9.4% jump that saw wages go from $128 to the current $140, though it falls short of the $171 workers were looking for in 2017.

Garments are Cambodia’s major export and the bulk of what the U.S. brings in from the country. Last year, Cambodia’s textile and apparel exports to the U.S. totaled $2.5 billion, and close to double that to Europe. For the first seven months of this year, exports are $1.25 billion, a 14 percent fall from the same time last year.

Factory owners had been seeking a lower $147 monthly wage for fear they won’t be able to remain competitive against low-cost neighbors like Bangladesh and Vietnam. Those involved in the negotiations settled on $153 after six days of talks, but workers aren’t happy with the new rate.

“All the workers’ union leaders and I, myself, are not happy with this new increased wage,” AP reported Ath Thorn, president of the Coalition of Cambodian Apparel Workers’ Democratic Union, who took part in the negotiations, as saying. “Due to the general expenses of the workers being too high, especially the prices of goods that keep increasing day by day, I think the fair minimum wage for the workers should be $171 per month.”

The Labor Ministry said, however, that it expects workers will earn somewhere between $170 and $181 considering other benefits when the hike sets in next year.

Unhappy workers in Cambodia have been bad news for the country in the past as some strikes have turned deadly as law enforcement tried to tamp down on protests.

Thorn said he intends to send a letter to the government, imploring them to consider supplementing the wage with additional benefits.