Listen to the audio version of this article (generated by AI).
Cambodia’s garment, footwear and travel goods (GFT) sector hit a record high in 2025, nearing $16 billion and making up more than half of total exports, yet the gains have not reached workers.
As the minimum wage rose marginally by $2 to $210 in 2026 amid easing inflation, garment workers say higher food, housing and transport costs continue to erode their purchasing power, underscoring the gap between export growth and daily realities of low-wage earners.
The GFT industry is the largest source of foreign exchange, with about 1,800 active factories employing roughly 1.1 million workers, majority women.
Sectorial exports hit a new milestone in 2025, representing 53% of total exports, which was 16% higher than 2024; a year that also recorded significant growth at 23%. Trade data for the first seven months of 2025 showed exports reaching $17.2 billion while imports stood at $19.2 billion.
In early 2026, workers in the garment, footwear, and travel goods sectors receive new government-mandated wages, bringing the base wage to $210 per month after $2 was approved by the government for employers to pay. But surveys showed that a vast majority of workers still fell below living wage thresholds, often dependent on overtime or loans to make ends meet.
A factory worker in Takeo province, Yiang Det, 22, said that wages in the garment sector are still too low for daily living expenses compared to the price of goods on the market, which is expensive, gasoline is expensive, and other expenses are many, which is an economic and psychological pressure for her.
Cambodia’s inflation was reported around 3.7% recently, largely driven by food prices — directly affecting workers’ budgets. Unions and rights groups demanded that the minimum wage be raised to $232 a month in 2026, up from $208 last year, which they said was “far below the threshold of a dignified life”.
To earn more than her basic salary to support her family, Det and her husband have to work additional hours, but at the moment they are working on and off every month, depending on the factory’s orders.
She hopes that food prices stabilize and prices to be more reasonable, for the government to consider raising workers’ wages to be on par with the price of goods and creating a decent working environment.
“The salary has only increased slightly, but the price of goods has increased significantly such as the cost of baby formula and loan interest. In fact, since the border issue, the price of goods has increased, even chilli peppers are expensive now,” Det said.
Hor Chamroeun, a garment worker in Kampong Speu province, said the rise of annual wage increase does not cover rising food prices, housing and fuel. He urged the Ministry of Labor and other stakeholders to work together to address workers’ needs, stressing that workers are the backbone of the sector.
“Market goods are expensive, but wages only increase by $2, but the prices are starting to increase. So, I request the government to help reduce the price of goods, and next year’s wage negotiations should increase by $6 or more because with a $2 increase, workers cannot live properly,” Chamroeun said.
He said rising transport and fuel costs force workers to eat “cheap and unhygienic food”, while vendors cite higher prices for vegetables, fish and meat.
The minimum wage is set using seven criteria under the Minimum Wage Law, including the cost of living, inflation, productivity, labor market conditions, competitiveness and sector profitability.
Workers spend an average of $408 a month on food and other essentials, almost double their typical income of $250 including overtime and small benefits, according to the Asia Floor Wage Alliance’s 2024 survey.
Ath Thorn, vice president of the Coalition of Cambodian Apparel Workers’ Democratic Union (CCAWDU), opined that the 2026 minimum wage growth remains “too low” to cover rising living costs, forcing workers to save and rely on overtime to make ends meet.
“If we compare the standard of living with the wage, it is difficult […] even with inflation, [the wage] in 2026 is still low,” Thorn said, noting that past negotiations aimed for $250 to $300 but have resulted in increases of only $2 to $4.
He added that weaker independent unions and limited worker advocacy have reduced pressure in wage talks, unlike in 2013–2014 when stronger mobilization led to much larger increases.
“So, the state determines by comparing the wages of civil servants or other sectors and the influence of workers and citizens. If there is no pressure, consideration and interest will increase,” Thorn said.
Data from the National Bank of Cambodia showed that inflationary pressure has eased in recent years, with overall inflation slowing to 1.28 percent year-on-year in November 2025, while core inflation—excluding food, non-alcoholic beverages and other volatile items—fell to just 0.64 percent.
Ky Sereyvath, senior economist and Director of the Institute of China Studies at the Royal Academy of Cambodia, said the price of gasoline, food and housing seems to be “relatively low”, while inflation in Cambodia is still low because income levels have not increased significantly. Therefore, when income levels fall, inflation also falls, he added.
However, Sereyvath sees that the wages in the garment sector, compared to other countries, are reasonable, that it is “not too low or too high”. What is important is that wages have been increasing every year according to the wage committee.
That means, he said, Cambodia should move forward to high-value-added industry from labor intensive, and workers must be skilled workers in order to receive higher wages. “Otherwise, wage increases will become a factor in the decline in investment and workers face the loss of ability and ability to perform their jobs.”
Last year, AMRO forecast growth to slow to 4.9 percent in 2025 and 4.7 percent in 2026 due to higher US tariff, while inflation would ease to pre-pandemic levels.
It recommended targeted fiscal support, accommodative monetary policy, and stronger regional cooperation in the short term, alongside export diversification and competitiveness reforms to ensure sustainable growth.
Sun Mesa, spokesperson from the Ministry of Labor, and Pen Sovicheat, spokesperson from the Ministry of Commerce did not respond at the time of publication.
