Remittals key in wage debate

Photo by: Will Baxter
Sun Seak Lay, 22, cooks rice for lunch before going to work in the morning at a garment factory in Phnom Penh earlier this week.

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It cannot help my family to have a good living standard, but it is better than nothing.

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via CAAI

Friday, 10 September 2010 15:00 Brooke Lewis and Mom Kunthear

SUN Seak Lay shares a cramped concrete house in Meanchey district with four other young women, all of whom work 12-hour days six days per week and can barely afford to feed themselves. At night, three of them sleep on a wooden platform on the ground level, while the other two sleep on the floor in a loft.

Like many garment workers, the 22-year-old sends a large chunk of her wages to her family, keeping just enough so she can eat, sleep and travel to work.

“Sometimes, I spend only 500 riels for a meal that tastes like water,” she said, “but I just eat it to keep my life going on for working.”

After leaving school at the age of 12, Sun Seak Lay worked alongside her parents in a rice field in Kandal province for four years before moving to the capital to take a job at a factory. Her chief goal is to keep her nine siblings in school.

“Poverty forced me to leave school and home in order to earn money for my family. I don’t want to work as a factory worker, but I have no choice,” she said. “I don’t want my brothers and sisters to leave school like me.”

At present, her basic wage amounts to about US$53 per month, and she also earns up to $30 in overtime. She sends the equivalent of her overtime pay home to supplement her family’s farming income. “It cannot help my family to have a good living standard, but it is better than nothing,” she said.

Kong Kunthea, one of Sun Seak Lay’s roommates, also 22, earns the same wages, and sends even more to her family in Kandal.

“I send my family from $40 to $50 per month, and keep for myself only about $20 per month, plus some for spending on water, electricity and rent,” she said.

In July, the Labour Advisory Committee, a body of government officials and industry representatives, upped the minimum wage – which is currently set at $50 plus a mandatory $6 cost-of-living allowance – to a total of $61 per month. The increase, the first since 2006, falls far below the $93 that some union leaders have asked for.

Both Sun Seak Lay and Kong Kunthea say the increase, set to go into effect in October, would be too small to make any noticeable impact on their lives, in large part because of the remittance payments they feel compelled to make.

But both women also said that no matter how much the wage increased, they would likely send almost all the extra money home.

Sun Seak Lay said that if the wage were to increase to US$90, she would double the amount she remits, meaning that, if she continued working overtime, she would be left with close to the amount she is already living on.

“I can send more money to my parents if I get a higher wage,” she said. “I will send $60 or $70 to them if I can get $90 per month.”

The extent to which remittances should be considered in arriving at a suitable wage for the sector has been a point of contention in the ongoing debate.

Last September, the Cambodia Institute of Development Study, a local research institute, released a report concluding that the ideal minimum wage for the sector would be $71.99 per month, or $74.85 per month once rising food costs are taken into account. The study – which drew from interviews with 300 garment workers representing 74 factories in five provinces – contended that at least $15 for remittances should be factored into the minimum wage.

“Workers stated that their core mission for entering the garment sector workforce is to earn cash income for their family,” the report stated. “If they do not earn enough to send remittances home, their parents will call them back. Thus, the minimum wage must cover not only the basic needs of workers, but also their dependants.”

Moeun Tola, head of the labour programme at the Community Legal Education Centre, which commissioned the CIDS report, yesterday recalled that many workers said their families would pull them out of the factories if they could not afford to send at least $15 home each month.

“They said that if they did not send at least $15 home, after two or three months their parents would come to the factory to get them and take them home,” he said.

Like Sun Seak Lay and Kong Kunthea, he said a minimum wage of $61 would not be enough to cover remittances and basic living costs.

“Living conditions will not change at all if the salary goes up to $61,” he said, and added that factory workers “will have to work more overtime” to counter rising living costs.

But Ken Loo, secretary general of the Garment Manufacturers Association in Cambodia, said yesterday that a minimum wage did not need to provide for remittances.

“We have to look at the definition of a minimum wage,” he said. “We think the minimum wage should ensure the worker a minimum standard of living. For us, minimum wage should not include remittances.”

He said he believed a minimum wage of $61 “probably does not allow for the full amount they would like to send home or contingency”, but that it would be sufficient to cover basic living costs.

“The minimum wage should at least ensure that workers should have decent housing, be able to afford decent food, etc,” he said.

“The current level of minimum wage definitely allows for that.”

This week, union leaders said they had collected more than 80,000 thumbprints from factory workers who would participate in a five-day strike scheduled to begin on Monday in protest of the minimum wage.

Both Kong Kunthea and Sun Seak Lay said they intended to participate. Asked why, Sun Seak Lay said, “I don’t know how my future will be if I still get too little salary like this.”

But even with the strike threat, Ken Loo said he was not worried about a potential staffing shortage should present workers conclude the new wage is unsustainable.

“There are 250,000 new entrants into the job market every year, according to the government,” he said. “The garment industry, which is the largest industry in the country, only employs around 300,000 workers. Please tell me where these 250,000 people will go?”