The Cambodian struggle to increase the minimum wage

Interview with:

Bean Channy, Project officer CLC

Meas Vanny, Legal Officer of C.CAWDU

There are about 700,000 footwear and garment industry workers in 700 factories in Cambodia, the sector which accounts for the lion’s share of the country’s exports. Hence, increasing the minimum wage for this sector has a huge impact. In the past two years, the efforts from the trade unions to get the minimum wage increased have met with much resistance and oppression, and also led to actions around the world, targeting Cambodia’s diplomatic representations and the big brands buying clothes in Cambodia.

Can you explain a bit of the history regarding the struggle for the minimum wage in Cambodia?

Before the elections of 2013, the minimum wage was around 80USD, which was largely insufficient for workers to meet their needs. According to Cambodian legislation, the minimum wage should be reviewed every five years. This is however too long, so trade unions try to get it reviewed annually. A study done by the government mandated Labour Advisory Committee for the review of the minimum wage came out in in August 2013 with the official recommendation to increase the minimum wage to between 157 and 177USD. Trade unions then started pressurizing the government and employers to implement this, but in 2014, it only went up to 100USD. In 2015, when it was 128USD, they demanded 177USD but it was raised to only 140USD in October 2015.

How come your demand was not met?

There was a lot of repression from the government. In January 2014, five protesters were killed. We also experienced disparity between trade unions, some which are more closely linked to the party in power and they dropped the demand. One of the reasons we demanded 177USD was also to differentiate ourselves from the opposition party, which was demanding 160USD.

The Garment Manufacturers Association in Cambodia (GMAC) said that any rise in wages would devastate factories already struggling to make a profit after the last increase. If wages rise any further the number of factories will fall. Do you think higher wages would scare away investors or buyers?

We do not feel brands would stop buying or investing in the country if wages were increased, but many politicians are also business men, so they often try to stop it. This struggle for higher wages needs to be fought by trade unions not only in Cambodia, but also in our neighboring countries, in all of South East Asia and in the continent.

In Cambodia, article 104 of the Labour Law contemplates that the guaranteed minimum wage is designed to “ensure every worker of a decent standard of living compatible with human dignity”.

The minimum wage was established with the Cambodian Labour Law 1997 and Article 107 gives authority to the Ministry of Labour and Vocational Training (MoLVT) to determine the minimum wage after receiving recommendations from the Labour Advisory Committee, a tripartite body consisting of representatives from the government, employer associations and trade unions. According to the Labour Law, a number of factors are taken into consideration when determining the minimum wage. This includes an assessment of the needs of workers (the cost of living, salary levels and comparative standards of living) as well as consideration of economic factors (economic development, productivity and employment).

However, despite articulating who is vested with the power to determine the minimum wage, the Labour Law does not provide a clear mechanism for minimum wage determination, no regular timeframes for review and no clear assessment of cost of living and economic indicators. Cambodian Labor Ministry secretary of state Oum Mean in June 2016: “We have created a scientific formula which all relevant parties are satisfied with and will accept the criteria for the revised minimum wage, which will be accomplished by using data from the National Institute of Statistics which will determine the economic factors including productivity, competitiveness, market conditions and the profit level of the sector”. He added that the social criteria including family conditions, inflation and the cost of living would be the foundation for calculating the minimum wage. Labor Minister Ith Samheng previously announced the government aimed to increase the minimum wage for workers to at least $160 per month. Trilateral discussions are scheduled for August 2016 and a new minimum wage is expected to come into effect on Jan. 1, 2017.