Cambodia: workers increase pressure for higher wages

Standing outside the Chinese-owned factory where she’s sewn clothes for the past seven years, Tith Maordy was complaining about money, and how there’s never enough of it. For Cambodian garment workers, this is a familiar lament.

With overtime and weekend work, Ms. Maordy can make up to $130 a month at the factory, which makes jeans and t-shirts for a retailer in Canada — well above $80, which until recently was the legally mandated minimum wage. The problem is that wages aren’t keeping up with the cost of living. Rent is up, and the price of groceries has risen considerably in the past month, ever since the government started enforcing certain import duties. Yellow noodles cost more. So do lemons, sugar, and chili peppers.

“I borrow the money from people almost every month, especially towards the end of the month,” she says.

That’s at the heart of the labor dispute that sent tens of thousands of garment workers out on strike last week, shuttering scores of factories, hamstringing an important part of Cambodia’s economy, and challenging well-connected foreign clothing manufacturers, many of whom supply goods for global brands like H&M, Nike, Asics, Gap, and Adidas.

Today, the dispute escalated sharply when demonstrating workers and security forces clashed in south Phnom Penh and at least four protesters were shot and killed, according to a Cambodian rights group. The clash illustrates not only how closely interwoven the authoritarian government of Prime Minister Hun Sen is with foreign clothing manufacturers. It’s also representative of what’s happening in many developing nations, where governments take a hands-off approach and let foreign manufacturers use low-wage, low-skill workforces to build profitable business models.

“This is a general trend in Asia,” says Lee Siew Hwa, Southeast Asia coordinator for the Asia Floor Wage Alliance, a union umbrella group headquartered in India. “Everywhere strikes, protest actions are happening to demand the living wage or the [minimum wage] that are able to support a decent life for workers.”

‘A proper living’Cambodia’s walkout started after the government announced an increase in garment workers’ monthly wage to $95 from $80, instead of an immediate doubling to $160 demanded by union leaders. Though the ministry’s plan called for a slightly larger bump every year through 2018, topping out at $160, unions and workers did not want to wait, viewing the government’s offer as not reflecting the industry’s booming profits here.

According to the Ministry of Commerce, garment exports from Cambodia have risen 22 percent over the first 11 months of 2013, to reach $5.07 billion. Exports to the US alone rose 9 percent in the same period, hitting $1.96 billion.

The Garment Manufacturers Association in Cambodia (GMAC), which represents hundreds of companies, has largely taken a backseat to the government in trying to end the dispute. At the beginning of the strike, the association advised member factories to close down to avoid violent altercations. Some remain open, and not all of the more than 400,000 workers employed in the industry have walked off the job.

There was no immediate comment regarding today’s clashes, though yesterday, GMAC said it wouldn’t be attending any discussions due to the tensions.

Khieu Savuth, an official at the Ministry of Labor and Vocational Training, defends the wage deal, saying any more would send buyers to other countries, hurting Cambodia’s largest industry. Garment manufacturing accounts for about 80 percent of Cambodia’s exports, and it’s also the largest manufacturing employer. Garment industry jobs are coveted, particularly for rural Cambodians, in a country where most of the populace scrapes by on subsistence wages, farming, or transporting cheap consumer goods from one town to another for resale.

“$95 is enough for workers to make a proper living, and they can earn around $150 to $160 per month, including bonus and overtime money,” Mr. Savuth says.

Chea Mony, the head of the Free Trade Union, one of several prominent organizations representing garment workers, says officials are being unrealistic.

“If it is enough, go to work like them, spend the money, and show me,” Mr. Mony says. “If it is enough, all the workers will accept their salary. If not, the government has to give more than that.”

According to the International Labour Organization, Cambodia’s minimum wage is lower than other manufacturing countries, such as Thailand ($243), the Philippines ($148), and Malaysia ($247), though higher than in Myanmar ($57) and Bangladesh ($72).

The political opposition, which has long been marginalized by Hun Sen and the ruling Cambodian People’s Party, has sought to rally workers to its cause by making wage increases part of its campaign platform. On Dec. 29, striking workers joining opposition demonstrators and others in one of the country’s largest mass demonstrations in years.

Social vs. economicFor many garment workers, however, politics take a backseat to more pressing day-to-day concerns, like keeping on the lights. The government decision to enforce import duties, part of a post-election reform meant to stamp out corruption among customs officers, led to the increase in consumer prices in many places.

Maordy, who comes from a province about 50 miles west of Phnom Penh, rents a small apartment near the factory, sharing the $50 monthly rent with a roommate. Electricity runs around $20 a month. She gets some help from her husband, who works construction.

Since the government’s decision on imports and pay hikes, Maordy, who works about eight hours a day, sometimes six days a week, has struggled to keep up. Her landlord increased her rent $5 when word of the wage increase got out.

Experts say the dispute is more nuanced than either the unions or manufacturers care to admit. Many point out that raising wages won’t necessarily scare off buyers, who look at a variety of issues when deciding to source from a country. There is also infrastructure, quality of garments, and workplace safety, an increasingly important concern since a factory collapse in Bangladesh eight months ago killed more than 1,100 people.

“There is a set of issues that are more social, and other types of issues that are more related to the economies,” says Maurizio Bussi, at the International Labour Organization’s office for Thailand, Cambodia, and Laos.