The National Council on Minimum Wage has set the 2021 minimum wage at $190 per month for workers in the textile, garment, and footwear industries, according to the Ministry of Labour.
In an announcement released after the final round of meetings yesterday, the Ministry of Labour said the National Committee for Minimum Wage has raised the minimum wage and Prime Minister Hun Sen is adding $2 more to make it $192.
This year the minimum wage was set at $187 and Mr Hun Sen added $3 to make it $190.
The statement said besides the monthly minimum wage, workers will still receive other fringe benefits including an extra $10 per month for regular attendance and an extra $7 per month for transportation and rent as well as seniority payments for workers in their position for over two years.
Therefore, each worker will be paid $209 to $220 per month, it said.
In an interview with reporters after the meeting, Minister of Labour Ith Samheng said: “The new figures were approved in line with the severe impact of the global pandemic on the supply and production chains and factory exports.
He said each party had a figure to propose in the meeting, but the difference of each figure could not help them to agree on a number.
“By weighing the gap between the figures of both parties, we met in the middle at $190, with all three parties agreeing on the figure,” Samheng said.
Union representatives had initially proposed a $12.35 or 6.5 percent increase of the current minimum wage said Cambodian Labour Confederation’s President Ath Thorn.
Yesterday, according to the Garment Manufacturers Association Cambodia (GMAC) representative, Nang Sothy, said employee representatives wanted to decrease the current minimum wage by $18, or more than minus 9 percent.
Talking on whether the new figure will still attract investors to the Kingdom, Sothy said: “It is tough for employers, However, it is acceptable.”
“In the spirit of togetherness and under the leadership of Mr Hun Sen, we have agreed on the changes to the wage,” he said.
“It is not a burden for overseas investors,” he added.
Thorn said that employers have enjoyed good profits in the Kingdom for many years while paying their staff a living wage. However, workers and unions are unhappy with the new figure, he said.
“The two-dollar increase for the workers helps them the least to solve the livelihood issue. Yet, if the rent goes up, it will be harder for them. COVID-19 and the EBA withdrawal has impacted the sector, so it must respond accordingly,” he added.
Surprisingly vocal on the issue and open to questions, a garment worker in Phnom Penh who identified herself only as Sreyneang, said: “If you do not have loans to pay, it is okay. But workers like me have more expenses on top of food and rent. I am disappointed with the result.
Garment worker Hy Samnang, said: “The price of goods is constantly going up, as well as rent, water and electricity. The $2 raise may not be enough.”
Samnang said that her landlord has not offered her a discount on her rent amid the pandemic and has told her if she cannot pay, they will replace her,” she added.
Another worker, Aun Pithon, said: “I understand that because of the COVID-19 pandemic, we have to expect less of an increase this year. However, the price of food and necessities, such as milk formula for my children, will be difficult to cover.”
Regarding the increase of $2, both Samheng and Sothy said that COVID-19 and the economic impact it has dealt on the industry has severely impacted it. However, they both said that the EBA withdrawal was not an issue.
According to a joint statement from GMAC and the Cambodia Footwear Association, by July this year, around 400 garment, footwear and travel goods factories suspended their operations in Cambodia – leaving over 150,000 workers jobless – due to the virus-induced pandemic
According to the National Bank of Cambodia’s first half 2020 report, industrial products for export fell by 12.5 percent, of which exports of garments fell by 10 percent, footwear increased by 2 percent and travel goods increased by 8 percent.