Garment sector sees employment drop as more factories come online

Photo by: Tracey Shelton
A garment worker threads a sewing machine at a factory in Phnom Penh. Labour Ministry data show that employment has dropped in the sector during the first half of 2010.

via Khmer NZ

Thursday, 12 August 2010 15:00 May Kunmakara

CAMBODIA added 17 more garment factories than it lost during the first six months of 2010, but employment in the sector declined during the period, according to figures obtained from the Ministry of Labor and Vocational Training yesterday.

Some 60 new factories created an additional 15,000 jobs during the period, but 43 shuttered factories put 15,700 garment labourers out of work, the statistics show.

Labour Ministry Secretary of State Oum Meam said yesterday he expected employment levels to further rise as the 60 new factories ramped up production in the coming months.

“When a garment factory opens, it cannot absorb a full complement of workers immediately,” he said. “It will take a short time for the factories to reach their employment potential.”

Factories were returning as overseas orders for garments improved, Oum Mean said, after the sector had been hit hard by a decline in demand from its crucial American market during the financial crisis.

“Companies decide to invest here because we have very clear policy and respect labour law,” he said. “Our infrastructure still needs improvement, but foreign companies can profit from investing in garments here.”

Ken Loo, Garment Manufacturers Association of Cambodia secretary general, agreed the sector was experiencing positive trends, and said that “16 new members [had] joined the association this year”.

However, the Free Trade Union of Workers in the Kingdom of Cambodia president Chea Mony objected to the figures from the ministry, dismissing them as “diplomatic”.

“The figures showing new employment should actually be very small – some factories have opened, but they are not yet operating,” he said yesterday.

Official employment levels did not reflect the level of new factories opening, and the number of unemployed people in the industry was more than 70,000 last year, he said.

Ministry figures show that 106 garment and shoe factories closed in 2009, leaving 45,000 workers unemployed. An additional 66 factories suspended operations during the period, resulting in temporary layoffs for 38,124 more workers.

Many of the new factories opening up in the first six months are actually existing firms changing to new locations within the Kingdom, according to Oum Mean. He said some of the 43 factory closures had resulted from employee unrest that created difficulties in filling orders last year.

“Now, these factories are closing because they have no orders,” he said. “However, I can say that the sector is strong enough to compete with many other countries in the region.”

Garment and textile exports rose over 10 percent year on year to $1.329 billion in the first half of 2010, from $1.205 billion in exports from January to June 2009, according to previous Ministry of Commerce figures.

Oum Mean cautioned unions against making problems for the government, saying they had pushed employees to strike in the past.

“The minimum wage has already been increased [from $50 to $61 per month],” he said.

“I know that workers also agreed, but the unions always make problems by pushing them to increase the wages further.”

“If the unions continue to push its workers to strike, who will suffer—is it workers?” he asked.

Chea Mony voiced his approval of the current minimum wage, and said that future increases in pay should come in areas such as overtime.