Government Proposes 100% Hike in Minimum Wage by 2018

The government proposed doubling the minimum wage for garment workers—from $80 to $160—within five years during a meeting with labor unions and garment manufacturers on Monday at the Ministry of Labor.

“We have a plan to raise the minimum wage up to $160 for garment workers, and I hope that there will be no more problems happening after wages start to be raised beginning next year,” Labor Minister Ith Sam Heng said.

The proposal will now be discussed by the Labor Advisory Council, a tripartite body composed of representatives from the government, unions and factory owners, during a meeting on the minimum wage planned for December 24, Mr. Sam Heng said.

In March, in the lead-up to the national election, the minimum wage was raised by $19, an almost 25 percent increase to the previous minimum wage of $61.

However, strikes have continued to plague the sector and members of the Garment Manufacturers Association in Cambodia (GMAC), during a conference on Sunday, slammed the government for its inability to curb industrial action.

The GMAC board put forward a proposal during the conference that would see the minimum wage increased to $130 by 2018.

Mr. Sam Heng, who first proposed an annual increase to the minimum wage in November, said that the government’s proposed five-year plan was not final, as it was sure to be hotly contested by both employers and unions.

“We have not yet made a final decision on how much we will raise wages because unions and employers have contrary ideas,” Mr. Sam Heng told reporters following the meeting Monday.

During the meeting, leaders of the country’s largest unions bickered over how significant the minimum wage hike should be in the coming years.

At Thorn, president of the Coalition of Cambodian Apparel Workers Democratic Unions, the country’s largest independent union, proposed to increase the minimum wage to $160 next year, as he said his union had conducted research showing that the living wage for workers is about $177.

CPP-aligned union leaders Chuon Mom Thol, president of the Cambodian Union Federation, and Sam Aun, president of the Cambodian Labor Union Federation, said that the minimum wage should be raised in smaller increments over time to prevent scaring away factory owners.

“I am worried about quickly raising the minimum wage because some garment factory owners told me they will close their factories and turn to Bangladesh or Burma,” Mr. Mom Thol said.

Ken Loo, secretary-general of GMAC, said that factory owners were open to raising the minimum wage, but remained worried that, without government action, they will continue to incur the costs of “illegal” strikes regardless of how much they pay workers.