The Cambodian government on Thursday set the new monthly minimum wage for the country's billion-U.S.-dollar garment and footwear sector at 140 U.S. dollars for next year, up 9.4 percent from the current 128 U.S. dollars, Labor Minister Ith Samheng announced.
The announcement of the decision came after the Labor Advisory Committee (LAC) proposed a minimum wage figure of 135 U.S. dollars to the government on Thursday morning and Prime Minister Hun Sen added another 5 U.S. dollars.
The LAC is comprised of 28 members: 14 government representatives and seven each from the factories and trade unions.
"Today, we decided on 135 U.S. dollars," Ith Samheng told reporters. "I think that this amount is reasonable and acceptable, although it has not responded to the wish of all parties." "In addition to the 135 U.S. dollars, Cambodian Prime Minister Hun Sen added another 5 U.S. dollars, so the monthly minimum wage for 2016 is 140 U.S. dollars," he said.
"The new wage will take effect from Jan. 1, 2016." The new wage was higher than the amount that factory owners proposed but far less than the raise demanded by some trade unions.
The factory owners wanted to increase the wage to 133 U.S. dollars only, while some trade unions demanded 160 U.S. dollars.
Kong Sang, vice chairman of the Garment Manufacturers Association in Cambodia (GMAC), said the hike would affect the survival of some factories, especially those with poor financial stability and weak purchase order.
"However, this is the government's decision, so we have to comply with it, although we are not satisfied," he said. GMAC's secretary general Ken Loo said he hoped that the factories would try to overcome their financial difficulties when the new wage comes into effect.
"If the buyers increase price, it's good, but we know from past experience, the buyers won't increase price, so then, we have to try to increase productivity," he said.
Ath Thorn, president of the Coalition of Cambodian Apparel Workers Democratic Union, which is the largest union in the Kingdom, said his union was still not satisfied with the new minimum wage.
"We will hold a meeting among our members in the coming days to decide whether to accept or oppose the new wage," he told reporters.
"We think that the new wage is still low and not enough for workers to live in a decent condition." According to Ath Thorn, with mandatory allowances of 17 U.S. dollars, the minimum amount factories pay their workers will be 157 U.S. dollars per month from next year.
Garment and footwear sectors, the kingdom's largest foreign currency earner, are comprised of nearly 1,100 factories with some 700,000 workers, according to the government figures.
The sector exported products worth 3.3 billion U.S. dollars in the first half of 2015, accounting for about 80 percent of the country's total exports.
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