UN calls for help with Cambodian wage hike

Minimum wages have increased by 28 per cent.

The United Nations Organisation (UN) has called on global brands to help Cambodian manufacturing companies absorb the rising costs they are facing after the country’s minimum wage was raised by 28 per cent to $128 a month.

The International Labour Organisation (ILO) – a UN agency dealing with international labour standards – estimates that the new minimum wage will increase overall average wages (which include bonuses and overtime) to $217 per month, thus raising wage bills by 19 per cent.

“It is important that all sides work together to ensure Cambodia’s garment industry remains economically viable,” said Maurizio Bussi, the ILO’s director for Thailand, Cambodia and Lao. “We call on the global brands to play their part. We have received encouraging signals that key buyers will honour the pledge they gave the Cambodian government in September.”

According to Malte Luebker, the ILO’s senior regional wage specialist, Cambodian factories have seen a substantial fall in their operating margins over the past three years.

“In principle, factories can respond by increasing efficiency, using measures that range from better work organisation to energy conservation,” he said. “However, our research shows that these gains are gradual and will only enable factories to cover a small share of the expected wage increase.”

Publishing Data

This article was originally published on page 2 of the March 2015 issue of SATRA Bulletin.

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