Unions request increase of nearly $12 ahead of minimum wage talks5 min read

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Garment workers buy lunch at a stall near their factory in June. Panha Chhorpoan
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Unions have settled on a recommended minimum wage increase of almost $12 ahead of three-party discussions with factory and government representatives that will determine the base salary for Cambodia’s garment and footwear industry workers for 2021.

Pav Sina, president of the Collective Union of Movement of Workers (CUMW), said that at an August 28 meeting attended by representatives from about 20 major unions, it was decided to suggest a raise of $11.59. The unions will propose their raise at a round of talks with the Garment Manufacturers Association in Cambodia (GMAC) and Labor Ministry officials due to start on September 3.

“All unions agreed on the chosen minimum wage to discuss in three-party meetings on September 3,” he said. “We agreed on the number $11.59, which amounts to a 6.1 percent raise.”

He said the unions’ recommendation had taken into account the effects of Covid-19 and cuts to the Everything But Arms (EBA) tariff-free trade agreement with the European Union, and said he hoped the other parties would not use the incidents as an excuse to undercut the minimum wage.

Sina appealed to the Garment Manufacturers Association in Cambodia (GMAC) and the Labor Ministry to consider workers’ struggles when making their minimum wage suggestions.

“I hope that both employers and the Labor Ministry will think about our request and they will consider a fair increase to workers’ minimum wage for 2021 to improve their living standards while they are facing this crisis,” Sina said.

According to a GMAC statement from June, about 400 factories have suspended operations and more than 150,000 workers lost their jobs due to the global Covid-19 outbreak.

The minimum wage affects about 800,000 workers from more than 1,000 factories in the textile, garment, and footwear industries and was set at $190 per month for 2020. It is determined by several rounds of annual three-party talks held between unions, GMAC, and the Labor Ministry, with this year’s meetings scheduled to start in September.

After holding internal meetings, each party will make its final suggestion for the minimum wage in a round of three-party meetings due to start on September 3.

Cambodian Labor Confederation President Ath Thorn said that although Covid-19 shutdowns and the EBA withdrawal has affected all parties this year, the minimum wage discussions will not affect workers until 2021, so their rising living expenses must be taken into account.

“Our unions’ stance is to increase minimum wages for workers because now their minimum wage is still low,” Thorn said.

Seang Vichet, a worker at Southland (Cambodia) Co Ltd, said that he hoped that the minimum wage talks would result in a fair wage raise, and that the ministry and GMAC would not use EBA cuts and Covid-19 as an excuse to keep wages low.

“Even now, it is difficult because some conditions were not respected even though they are stated in the law, such as the factory ending workers’ contracts or terminating workers without compensation payments,” Vichet said. “I think that judging by the present situation, minimum wage discussions will not be fruitful for workers.

He said employees’ current salaries do not match their expenditures. As an example, he said the price of food sold at stalls near the factories gates had been rising, with workers now spending more than 1,500 riel per meal, as opposed to 1,000 in the past.

“Now, workers spend a lot for their food everyday and moreover, many of our benefits have been cut… so it has made us worse off,” Vichet added.

Hat Nak, 29, an employee at Can Sport Shoes Company factory in Kampong Chhnang province, said she was hoping for a wage raise next year because the price of food and goods at the markets has increased, so her current $190 per month salary no longer covered her living expenses. 

“If employers and the government agree to increase our salary it would be good,” Nak said. “Nowadays, our salary is not in line with the price of goods at the markets and it’s even worse if we need the money to pay microfinance institutions.”

She added that she was under extra financial burden after her factory had suspended operations for July and August.

GMAC Deputy Secretary-General Kaing Monika said that Cambodia, like most other countries around the world, has faced an economic crisis due to Covid-19, a situation that has been exacerbated by the partial withdrawal of the EBA.

“According to the two crises, the figure of export [of products from the garment factories] has declined a lot,” he said. “So if we analyze this normally, a minimum wage increase, especially to the amount raised by the unions, is not realistic.”

He said he did not know what factors the unions had based their suggested wage on, but that they should be assessing both social and economic factors and subfactors in making their decision. 

The minimum wage should be set based on research provided by the National Institute of Statistics, he added, with any other studies only taken into account unofficially. The National Institute of Statistics does not suggest a figure in its annual report, but provides assessments of social and economic factors.

“For our sector, first we base it on the real situation. We think that it will be difficult to increase [the minimum wage]” but officials will attend the meeting regardless, he said.

Labor Ministry spokesman Heng Sour could not be reached for comment on August 31, but he said in June via Telegram messenger that the three-party meetings would proceed as usual in accordance with the law.

“The law requires us to hold the meeting, so we must meet each other,” Sour said. “The law does not say that wages must rise every year, either up or down, depending on changes in the seven criteria of minimum wage.”

San Sras, an official at the General Secretariat of the National Council on Minimum Wage at the ministry, said his team had finished their survey on workers’ living conditions in the wake of Covid-19 in July, but he declined to share results of the survey.

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