Labor officials will raise the minimum wage to $140 per month, following eight days of meetings between union leaders and factory managers of the Labor Advisory Committee.
The figure is lower than the $160 unions had negotiated for, a wage they said was necessary to keep up with the rising cost of living.
The parties had reportedly agreed on a wage of $135, but Prime Minister Hun Sen suggested raising it another $5 per month, officials said in an announcement Thursday.
Neither unions nor factories were happy with the final wage. Union leaders said the wage won’t help workers with inflation and increased housing prices. Factories said the wage would drive businesses out of Cambodia.
Workers have long pushed for a higher wage, culminating in violent protests in late 2013 and early 2014 that left at least five people dead. At the time, the government raised the minimum wage to $128 per month.
Ken Loo, secretary-general for the Garment Manufacturers Association in Cambodia, told reporters after the meeting Thursday that the decision will hurt factories, some of which already face closures due to the previous wage increase and a loss of buyers.
“I’d say $128 was already having an effect, needless to say $140,” he said. “I hope the factories will try to recover some of the increased costs. If the buyers increase the prices, it’s good. But we know from past experience that the buyers won’t increase the prices.” With increased costs, he said, “how are factories supposed to survive?”
Last month, 15 factories laid off workers due to a lack of orders from buyers. Still, GMAC figures show that garment orders for the first three months of the year were $1.34 billion, compared to $5.34 billion in orders for all of 2014.
Ath Thorn, president of the Coalition of Cambodian Apparel Workers’ Democratic Union, told reporters Thursday that the decision was unfair for labor. There are only seven union leaders in the Labor Advisory Committee, compared to 14 members from GMAC.
“I do not agree with this decision and we’ll keep demanding $160,” he said. Workers will likely protest the new wage, he added.
The International Labor Organization, meanwhile, applauded the negotiated figure, but it said all parties should be prepared to review it in talks next year. “The ILO Country Office wishes to acknowledge the genuine efforts by all parties to reach a tripartite consensus, and to acknowledge the significant progress made in using data, analysis and tripartite consultative approaches to arrive at a decision,” the organization said in a statement.
