Swedish fast-fashion retailer H&M has expressed its support for the minimum-wage increase for workers in Cambodia’s garment industry but the sector’s independent trade unions are discussing strike action.
The raise, which will boost monthly pay from $128 to $140 for 700,000-plus employees when it comes into effect on January 1, was announced last Thursday after tense negotiations and falls short of union demands for $160.
“We are not happy,” said Ath Thorn, president of the Coalition of Cambodia Apparel Workers’ Democratic Union (CCAWDU), who on Monday met with colleagues and other unions to decide whether or not to strike in the coming weeks.
Leaders from 14 trade unions had united behind the $160-a-month proposal after weeks of demands ranging from $158 to $207, but the tripartite Labor Advisory Committee (LAC)—comprising government, union and employer representatives—agreed on $135. Prime Minister Hun Sen then raised that by $5 to $140.
“We are disappointed by the new minimum wage for the garment industry in Cambodia, which is below the expectations of workers who were interviewed in our research before negotiations began,” said Jyrki Raina, general secretary of IndustriAll Global Union, which has chosen Cambodia as the garment-producing country in which to start its ACT initiative, an industry-wide collective bargaining structure to negotiate and agree wages and conditions.
This isn’t the first time that Cambodia’s garment unions have had to settle for less than requested. Last year, the government resisted demands for $140 and increased the monthly minimum wage from $100 to $128.
Garment manufacturing accounts for around 80 percent of the country’s exports, mainly to the U.S. and the E.U., and is worth more than $5 billion annually.
While factory owners are concerned that raising the monthly pay will cause the likes of H&M, Inditex and Primark to take their business to other low-cost countries, IndustriAll pointed out that the 9.4 percent increase is still lower than the garment-worker wage in Vietnam.