International Herald Tribune
The Associated Press
Published: September 10, 2008
PHNOM PENH: Soaring inflation and stagnant wages have prompted thousands of workers in Cambodia's garment industry to quit and look for better-paying jobs or return to the countryside, labor union leaders said Wednesday.
The exodus raises concerns about the future of the country's main dollar-earning industry.
"Their factory wages could no longer cope with rising food prices," said Chea Mony, president of the Free Trade Union of Workers of the Kingdom of Cambodia, which had 80,000 members at the start of the year.
So far this year, 27,000 employees have quit, Chea Mony said. Many are now working in entertainment clubs like karaoke parlors, where they can earn more than at their previous jobs, while others have returned to their homes in the countryside, where living costs are lower.
In April, garment manufacturers raised wages by about $6 to an average of $50 a month.
But union leaders said the raise had done little to help the workers cope with the high costs of living in and around Phnom Penh, where most of the factories are located.
The consumer inflation rate rose to 22 percent in July, up from 18.7 percent in January, the last time the figure was released.
High food prices are hitting Cambodia's poor, who spend approximately 70 percent of their total household consumption on food, according to a recent World Bank analysis.
Chhay Than, the Cambodian minister of planning, said inflation in July was the highest rate recorded in 15 years and had been driven mainly by the high price of oil.
The consumer rate remained at 22 percent for August, though that figure will be officially released only next week, said Khin Song, deputy director of the planning ministry's price index department.
Factories have been having difficulties trying to hire new workers to fill the empty slots in their assembly lines, said Chuon Mom Thol, president of the Cambodian Union Federation, another labor group.
The garment industry is the country's major export earner and employs about 350,000 people, mostly women.
Kaing Monika, the external affairs manager of the Garment Manufacturers Association of Cambodia, said the country's clothing exports in the first six months of this year were worth about $1.35 billion, a 4 percent increase over the period in 2007.
But he said the profit margin, calculated to have been around 2 percent in the first half, was becoming thinner or nearly nonexistent for most factories because of high production costs caused by skyrocketing prices for oil and other raw materials.
"The buyers did not pay higher prices, and the workers are demanding more wages because of the inflation that makes it really hard to cope with the current cost of living," Kaing Monika said, adding that the outlook for the industry was "getting very tough."
The Associated Press
Published: September 10, 2008
PHNOM PENH: Soaring inflation and stagnant wages have prompted thousands of workers in Cambodia's garment industry to quit and look for better-paying jobs or return to the countryside, labor union leaders said Wednesday.
The exodus raises concerns about the future of the country's main dollar-earning industry.
"Their factory wages could no longer cope with rising food prices," said Chea Mony, president of the Free Trade Union of Workers of the Kingdom of Cambodia, which had 80,000 members at the start of the year.
So far this year, 27,000 employees have quit, Chea Mony said. Many are now working in entertainment clubs like karaoke parlors, where they can earn more than at their previous jobs, while others have returned to their homes in the countryside, where living costs are lower.
In April, garment manufacturers raised wages by about $6 to an average of $50 a month.
But union leaders said the raise had done little to help the workers cope with the high costs of living in and around Phnom Penh, where most of the factories are located.
The consumer inflation rate rose to 22 percent in July, up from 18.7 percent in January, the last time the figure was released.
High food prices are hitting Cambodia's poor, who spend approximately 70 percent of their total household consumption on food, according to a recent World Bank analysis.
Chhay Than, the Cambodian minister of planning, said inflation in July was the highest rate recorded in 15 years and had been driven mainly by the high price of oil.
The consumer rate remained at 22 percent for August, though that figure will be officially released only next week, said Khin Song, deputy director of the planning ministry's price index department.
Factories have been having difficulties trying to hire new workers to fill the empty slots in their assembly lines, said Chuon Mom Thol, president of the Cambodian Union Federation, another labor group.
The garment industry is the country's major export earner and employs about 350,000 people, mostly women.
Kaing Monika, the external affairs manager of the Garment Manufacturers Association of Cambodia, said the country's clothing exports in the first six months of this year were worth about $1.35 billion, a 4 percent increase over the period in 2007.
But he said the profit margin, calculated to have been around 2 percent in the first half, was becoming thinner or nearly nonexistent for most factories because of high production costs caused by skyrocketing prices for oil and other raw materials.
"The buyers did not pay higher prices, and the workers are demanding more wages because of the inflation that makes it really hard to cope with the current cost of living," Kaing Monika said, adding that the outlook for the industry was "getting very tough."
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