By Tim Johnston in Bangkok
Published: September 13 2010
Thousands of Cambodian garment workers have gone on strike for higher wages, reinforcing a trend that has seen substantial pay increases among some of Asia’s lowest-paid workers.
Growing labour unrest is hitting low-wage industries across Asia, with widespread strikes in China, Vietnam and Bangladesh as well as Cambodia as economies start to recover from the global financial crisis.
Cambodian clothing and footwear workers on Monday started a five-day strike in protest at the government’s decision to lift the minimum wage from $50 to $61 a month. Some unions agreed to the deal but others want it raised to $93.
The unions said they had called out 80,000 staff, almost a quarter of Cambodia’s garment workforce. However, Ken Loo, secretary-general of the Garment Manufacturers’ Association in Cambodia, said fewer than 20,000 people were on strike on Monday and that only seven factories from a total of 470 were closed, although some of the country’s largest garment plants were among those affected.
“We have already advised our members to seek a court decision on the legality of the strikes,” he said. “If the court says they are illegal, the workers can be dismissed.”
The garment sector accounts for between 70 and 90 per cent of Cambodia’s exports. Garment manufacturers say labour is already more expensive than in neighbouring countries. According to Mr Loo, when allowances and overtime are taken into account, employers pay an average of $90 a month, which would rise to $95 when the $61 minimum wage level came into effect in October.
Low-cost manufacturers in Asia were able to keep wages down during the financial crisis – with some 30,000 Cambodian garment workers losing their jobs – but as order books have filled, workers have begun to flex their muscles.
In China earlier this year Honda raised salaries at its plants by 24 per cent after workers went on strike, and Foxconn, the Taiwanese-owned contract electronics manufacturer, lifted wages by a third after a number of suicides. Vietnamese workers have held strikes in pursuit of higher pay, while millions of textile workers in Bangladesh staged a walkout last month after the minimum wage was lifted from $25 a month to $43. They wanted at least $73.
Although garment manufacturing is easy to relocate, there are few under-industrialised Asian nations for manufacturers to move to. With upward pressure on wages in all the lowest-cost production centres, many manufacturers see little option but to accede to at least some union demands.
The garment sector has been at the cutting edge of Cambodia’s industrialisation, although productivity is lower than in many of its neighbours. Most of the factories are foreign owned, with research last year by Japan’s Ritsumeikan Center for Asia Pacific Studies showing that more than 60 per cent of the garment plants were owned by interests in Hong Kong, Taiwan and mainland China.
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