Cambodia: Minimum Wage For Textile & Clothing Sector Increased

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Cambodia: Minimum Wage For Textile & Clothing Sector Increased

Cambodia agreed on beginning of October to raise the monthly minimum wage for the textiles sector to US$ 140 from next year, short of demands by trade unions long at odds with the government over pay. The decision was agreed on through a vote conducted with the representatives of the government, factories and unions, with the majority supporting an increase to US$ 135 a month from US$ 128. The government then raised that to US$ 140.Pay for the 600,000 people who work in mostly Asia-owned factories, churning out clothes and shoes for the likes of Gap, Nike, Adidas, H&M and Inditex has been a thorny issue in impoverished Cambodia. The US$ 5 billion sector is Cambodia's most important, but strikes in recent years have brought the brands to a position of worry, enticed by lower costs than powerhouse China. Major unions had been seeking a minimum wage of US$ 160 a month, having scaled down an initial demand from US$ 177, and threatened strikes. It was unclear if they would follow through. Prime Minister Hun Sen took the decision himself to raise the agreed wage by a further US$ 5.

Textiles growth has been one of Hun Sen's top achievements, but his government has clashed repeatedly with unions and its violent crackdown on strikes has seen union support shift towards his political opponents. Ath Thon, president of the 78,000-strong Coalition of Cambodian Apparel Workers' Democratic Union, chided factories & some unions for siding with the government. The govt. has a tricky balancing act to keep Cambodia competitive, and stable. Though its wages are low, it faces strong competition from neighbouring Vietnam, which last year shipped US$ 31 billion in garments and shoes for the same brands that use Cambodian factories. Vietnam's textiles exports to the United States, Cambodia's biggest market, will be tariff-free once a Trans-Pacific Partnership (TPP) agreed on comes into effect.