The government has set the new minimum wage in the country’s crucial garment sector at $153 a month, a 9 percent increase in an industry that employs more than 600,000 workers in Cambodia and accounted for more than $6 billion in exports last year.
The government-led Labor Advisory Committee voted on Thursday to set the minimum wage — currently $140 and scheduled to change in January — at $148, with Prime Minister Hun Sen adding $5 to the figure, according to Labor Minister Ith Sam Heng.
“The result of our voting today is overwhelmingly in support of $148 and the head of the government…decided to add $5 more. So the the minimum wage in 2017 is $153,” Mr. Sam Heng told reporters at the Ministry of Labor in Phnom Penh.
After three rounds of negotiations in recent weeks, union and factory representatives remained $24 apart in their recommendations for the new wage – unions dropped their demand to $171 while factories came up slightly to $147. The government proposed a $148 wage early on in the negotiating process.
Wages have gone up steadily in the country’s largest export industry in recent years, incrementally rising from just $61 in early 2013. But that came only after years of stagnation, and unions say a living wage is closer to $200.
With fierce international competition for business in the global garment industry, however, factory owners argue that Cambodia’s main draw for investors is low labor costs, and that each raise makes the country less competitive.
In its latest bulletin on the industry, the International Labor Organization warned that Cambodia would struggle to attract investment if labor costs continued to rise without parallel gains in productivity or the purchasing price paid by international brands.
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