The workers’ union representative proposed an increase of $14 wage to the current $204 minimum wage for garment workers with the National Minimum Wage Council for 2025, with employers saying they can only offer an increase of $1.
Following a meeting at the Ministry of Labor and Vocational Training, Kim Chansamnang, deputy chief representative of the Workers’ Professional Organization, said on Thursday that the $14 hike was a preliminary proposal for the workers’ wage discussion.
He said the figure was based on the current inflation rate, company’s profitability and rising export orders, as well as the country’s peaceful political situation.
“From the side of the union, I think $14 was very reasonable [although] what is accepted is uncertain. It is based on further discussions because both sides have their own arguments. But we can expect a wage increase in 2025,” Samnang said.
The minimum wage increased from $40 in 1997 to $145 in 2015, and gradually rose to $200 in 2023, and $204 in 2024.
However, Samnang was concerned that when wages rose, workers would have to pay higher rent and goods, which would push up their expenses. He asked homeowners and businesses not to raise rent and price of goods excessively, respectively.
Minister Heng Sour told reporters that the next tri-party National Minimum Wage Council meeting will be on September 6, 2024. He said the Minimum Wage Advisor explained the variability of the seven wage criteria, and each side studied and calculated their respective preliminary figures, with workers’ representatives proposing $14 and employers $1 for 2025.
“These are preliminary figures. When there are subsequent meetings, this position can be further mediated and discussed,” Heng Sour said. The figure may increase and decrease according to the actual situation when both parties have submitted their argument.
The minister said both sides seem to be mature and understanding about wage negotiations, and expects more compromises so that both sides find a common ground in the 2025 wage negotiations.
Noting that anything above zero is good news, Heng Sour believes that an increase over $1 depended on how either side understood each other.
If they cannot reach a middle ground, the government will mediate so that both parties can come to a compromise. The government will also implement a voting system in the final meeting on September 26.
“Whether the wage increase is high or low, both sides have agreed to a minimum wage increase in 2025, only that the increase will be within that range; the employer is adding $1, and the workers are asking for $14,” Heng Sour said.
According to the ministry, wage negotiations must adhere to the seven criteria in the Minimum Wage Law, including household status, inflation, living costs, productivity, national competitiveness, labor market status and the garment sector’s profit margins.
Nang Sothy, vice president of Cambodian Federation of Employers and Business Associations, said the proposal by the workers was technically suitable, but employers have to consider another angle as they face difficulties with bank loans.
For example, interest rates; when ordinary people borrow, the interest rate is low, but when a business borrows money from the bank, the interest rate is high due to the economy, he said.
Therefore, the $1 increase hike was just the beginning of negotiations for the next meeting and it is not the final amount for the minimum wage increase.
“Salary will increase because it is a government policy, but for us, the $1 proposal is a good start,” Sothy said.
He added that workers saw growth in investment, but in fact, investors who come have not decided to invest, which was the problem. In comparison to other countries, the minimum wage in Cambodia’s garment sector was “far superior” than Vietnam, for instance.
Prum Sarath, 43, told CamboJA News that he worked at Yida factory for nine years, earning $204 a month. He hopes that the salary would increase to $250, which is adequate to cover workers’ daily expenses.
He claimed that their daily expenses were high as they have to settle their bank loans, school fees, and other bills.
“My household expenditure is at least $10 a day, and this is only for food and expenses for my children. I have not even thought about paying my bank loan,” he said.
Mech Sienghai, 38, who has been working in Zhen Tai for 12 years, expects to see an increase in minimum wage from $10 upwards next year given the rise in the cost of goods.
“The current minimum wage will not be able to meet daily needs if it is deducted from the cost of rent and daily expenses,” she told CamboJA News.
Sienghai wants the ministry and other stakeholders to study the minimum wage installation properly as well as the rise in cost of daily necessities. She said if their salary rose but so did commodity prices, the new wage would not cover daily expenses.
Yang Sophorn, president of Cambodian Alliance of Trade Unions, told CamboJA News that the study of minimum wage by workers unions and international organizations proposed a $225 wage increase, which would cover workers’ expenses.
The union came up with a joint proposal, calling for a 7% increase, equivalent to $14, to the current salary by studying the economy and meeting the seven criteria in the Minimum Wage Law.
