Garment

Minimum Wage Increased to $200

After tough negotiations, the minimum 2023 wage for garment workers has been set at $200, with concerns raised that the $6 raise is not enough to finance rising inflation and the cost of living
People vote for new minimum wage at the Ministry of Labour and Vocational Training, September 21, 2022. Kiripost/Siv Channa
People vote for new minimum wage at the Ministry of Labour and Vocational Training, September 21, 2022. Kiripost/Siv Channa

Join Kiripost on Telegram for latest business & tech coverage

Cambodia has increased the minimum wage for textile, garment, footwear, and manufacturing industries to $200 for 2023, an increase of $6 from last year.

During Wednesday’s meeting with union representatives, employers representatives, and the Ministry of Labour and Vocational Training, the majority voted for $198. Prime Minister Hun Sen added another $2, meaning from January 1, the new minimum wage will be $200.

The Ministry said in a statement on Wednesday that the National Minimum Wage Council had proposed a figure of $198 to the Minister of Labor and Vocational Training to review as the minimum wage for workers in the textile, garment, footwear, and travel and bag products for 2023.

Meanwhile, other employee benefits were maintained. This includes travel and accommodation expenses of $7 per month, a regular work bonus of $10 per month, a meal allowance for voluntary overtime work of 2,000 riel per day, and a seniority bonus ranging from $2 to $11 per month for workers who have worked from the second to 11th year.

“On average, each worker will receive a minimum salary of $217 to $228 per month,” cited the statement.

There are 17 members of each group that represent workers, employers, and the government. A total of 25 meetings were held from August 15 to September 21 based on the principles of democracy, friendship, cooperation, and transparency.

The seven criteria include the study of social and economic factors. Social factors refer to household status, inflation rate, and the cost of living. Economic factors refer to national competitiveness, productivity, labor market status, and sector profit margins.

Three figures were proposed from the workers' side of $206, $210, and $213. Representatives of the government, based on technical and scientific characteristics, set the figure at $198.

The National Minimum Wage Council conducted a secret ballot procedure in the morning meeting on September 21 as the last meeting to support each figure. Tripartite representatives voted for the figure of $198 and received 46 votes out of 51 votes.

Pav Sina, President of the Collective Union of Movement of Workers (CUMW), said as the decision was made based on voting, it must be accepted even though it is less than what was proposed by the workers. However, the increase in minimum wages has not yet responded to inflation.

“While worker wages are increasing, they don't take much advantage of benefits, such as a decrease in national holidays falling on weekends. In post-covid times, wages should be increased as a result of the worker's compensation,” Sina told Kiripost.

Kaing Monika, Deputy Secretary General at the Garment Manufacturers Association of Cambodia (GMAC), said that together with the payment of pension contributions, labor costs will increase by an additional $10 to $12 per worker, which will inevitably affect the companies' profit margins as factories are unable to raise production costs to buyers due to competition with other countries.

“Do not forget that we still have other allowances and now the average income of an employee is about $270 per month,” Monika said.

“The factories must continue to work to improve labor productivity, reduce production wastage and reduce unnecessary costs. However, this is not an easy task to achieve. We call on international buyers to continue to support Cambodia by continuing to place orders and at a price that is commensurate with our new wage levels for next year.”

Garment worker Kim Kemly, 40, told Kiripost that he appreciates​ the increase, although it does not meet the proposed amount, he is happy to accept. However, he added, this slight increase in wages could lead to concerns about rising goods prices.

“Before covid, I handled my family’s monthly expenses, but post-covid, I can’t handle it and needed more money from my wife. I’m worried about increasing productivity as well as wages, raising rent, and gasoline prices. The worker had constant expenses, but income was irregular.”

Join Kiripost on Telegram for latest business & tech coverage