Our award-winning reporting has moved

Context provides news and analysis on three of the world’s most critical issues:

climate change, the impact of technology on society, and inclusive economies.

Cambodia raises 2017 minimum wage for textile industry workers

by Reuters
Thursday, 29 September 2016 11:01 GMT

Women work in a clothes factory in Phnom Penh, Cambodia March 28, 2016. Picture taken March 28, 2016. REUTERS/Samrang Pring

Image Caption and Rights Information

Industry has created 600,000 jobs that sustain rural families and have spurred years of robust growth

By Prak Chan Thul

PHNOM PENH, Sept 29 (Reuters) - Cambodia agreed on Thursday to raise to $153 from next year the minimum monthly wage of workers in its crucial textiles and footwear industry, which generates $6 billion annually for the economy.

The industry has created 600,000 jobs that sustain rural families and have spurred years of robust growth, but strikes by increasingly assertive and politicized unions have become a problem for the country.

Thursday's decision followed a majority vote by government representatives, factories and unions who backed the raise from a figure of $140 now, following months of negotiations.

The increase will help to raise workers' standards of living and boost productivity, the labour ministry said in a statement, but added, "Other benefits that workers have been receiving must be kept the same."

The new wage takes effect in January, it said.

It fell short of the sum of $171 sought by the unions, which complained that their members struggle to make ends meet.

"We didn't get what we demanded but we thank those involved for their efforts," said Pav Sina, president of the Collective Union Movement of Workers, which says its represents 35,000 workers.

Sustaining the textiles sector is a tricky balancing act for Cambodia. Higher wages could appease workers but make the country uncompetitive, the unions say.

"If the minimum wage is set to raise every year, our industry may face challenges," Sina said. "Investors may leave to find cheaper places, so we will have to see what the future will be like."

For instance, the new Cambodia figure is more than double the $64 minimum wage for garment workers in Bangladesh, the world's second biggest exporter of garments after China.

(Reporting by Prak Chan Thul; Editing by Amy Sawitta Lefevre and Clarence Fernandez)

Our Standards: The Thomson Reuters Trust Principles.