Cambodian garment manufacturer call for wage cuts


As the coronavirus pandemic bites and export numbers drop, garment manufacturing companies in Cambodia have asked the government to consider a temporary suspension of the minimum wage of $190 to help the sector steering through difficult times, Nikkei Asian Review reported.

The petition comes as more than 250 factories employing some 130,000 workers have suspended operations after demand for textiles and footwear collapsed in the wake of the coronavirus crisis, and more layoffs are expected.

The Garment Manufacturing Association in Cambodia said employers needed “flexibility” avoid closures and remain competitive since there was no indication as to when the situation would improve and orders from clients abroad will resume.

The government did not yet react to the proposal, while union leaders are openly opposed to it.

In the past years, Cambodia has approved several wage increases for the garment sector, with minimum having risen by 137 per cent since 2013. While the wage seems still low, there are countries in Asia and Africa which pay less for workers in this particular industry.

Crucial industry for Cambodia

Cambodia’s apparel and footwear sector is vital to the country’s economy, generating $10 billion in annual exports and employing 800,000 people. The pandemic has dealt a big blow to the industry.

After years of annual average growth of around seven per cent, Cambodia is facing its first gross domestic product contraction since 1994, as the pandemic hits the main economic drivers of apparel, tourism and construction.

In May, the World Bank forecast at least 1.76 million jobs were at risk with GDP shrinking between one and 2.9 per cent this year. In a more dire assessment, the Asian Development Bank last week predicted GDP could even contract by 5.5 per cent.

As the coronavirus pandemic bites and export numbers drop, garment manufacturing companies in Cambodia have asked the government to consider a temporary suspension of the minimum wage of $190 to help the sector steering through difficult times, Nikkei Asian Review reported. The petition comes as more than 250 factories employing some 130,000 workers have suspended operations after demand for textiles and footwear collapsed in the wake of the coronavirus crisis, and more layoffs are expected. The Garment Manufacturing Association in Cambodia said employers needed “flexibility” avoid closures and remain competitive since there was no indication as to when the situation...


As the coronavirus pandemic bites and export numbers drop, garment manufacturing companies in Cambodia have asked the government to consider a temporary suspension of the minimum wage of $190 to help the sector steering through difficult times, Nikkei Asian Review reported.

The petition comes as more than 250 factories employing some 130,000 workers have suspended operations after demand for textiles and footwear collapsed in the wake of the coronavirus crisis, and more layoffs are expected.

The Garment Manufacturing Association in Cambodia said employers needed “flexibility” avoid closures and remain competitive since there was no indication as to when the situation would improve and orders from clients abroad will resume.

The government did not yet react to the proposal, while union leaders are openly opposed to it.

In the past years, Cambodia has approved several wage increases for the garment sector, with minimum having risen by 137 per cent since 2013. While the wage seems still low, there are countries in Asia and Africa which pay less for workers in this particular industry.

Crucial industry for Cambodia

Cambodia’s apparel and footwear sector is vital to the country’s economy, generating $10 billion in annual exports and employing 800,000 people. The pandemic has dealt a big blow to the industry.

After years of annual average growth of around seven per cent, Cambodia is facing its first gross domestic product contraction since 1994, as the pandemic hits the main economic drivers of apparel, tourism and construction.

In May, the World Bank forecast at least 1.76 million jobs were at risk with GDP shrinking between one and 2.9 per cent this year. In a more dire assessment, the Asian Development Bank last week predicted GDP could even contract by 5.5 per cent.

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