Global apparel brands that source their products from Cambodia should play a part in helping the industry absorb the new minimum wage of US$128 per month, according to experts from the International Labour Organization (ILO).
The new minimum wage for the approximately 500,000 workers in Cambodia’s clothing and footwear industry came into effect on 1 January. As a result, average wages (which include bonuses and overtime) in the garment industry are likely to rise from US$183 to US$217 per month, according to estimates made by the ILO’s country office for Thailand, Cambodia and Laos.
The pay rise is expected to increase factories’ wage bills by approximately 18.7%. It comes on top of earlier adjustments that have more than doubled the minimum wage since 2012, when it stood at US$61. At the same time, the prices that Cambodian factories receive in their main markets have been stagnating or declining. For example, the US Bureau of Labor Statistics has calculated that prices for apparel imports from ASEAN countries have fallen by 4.5% since June 2012.
For the full story, see the February 2015 edition of Textiles South East Asia. Not a subscriber? Sign up HERE