UN calls on brands to help Cambodian manufacturers absorb wage hike
06/01/2015
The International Labour Organization (ILO) estimates this will increase overall average wages in the garment industry – which include bonuses and overtime – from $183 to $217 per month, increasing factories’ wage bills by 19%.
“It is important that all sides work together to ensure Cambodia’s garment industry remains economically viable,” said Maurizio Bussi, the ILO’s director for Thailand, Cambodia and Lao. “We call on the global brands to play their part. We have received encouraging signals that key buyers will honour the pledge they gave the Cambodian Government in September.”
The rise comes in the wake of other adjustments since 2012 that have seen the minimum wage increase from $61 per month. At the same time, the prices that Cambodian factories receive in their main markets have been stagnating or declining, with the United States Bureau of Labor Statistics calculating a 4.5% drop in prices paid for apparel imports from Association of Southeast Asian Nations (ASEAN) countries since June 2012.
“Caught between these two forces, factories have seen a substantial fall in their operating margins over the past three years,” said Malte Luebker, the ILO’s senior regional wage specialist. “In principle, factories can respond by increasing efficiency, using measures that range from better work organization to energy conservation. However, our research shows that these gains are gradual and will only enable factories to cover a small share of the expected wage increase.”
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