Workers’ monthly minimum wage for 2023 raised to $200

Content image - Phnom Penh Post
Garment factory workers on their lunch break in the capital’s Russey Keo district on September 21, just after the final vote on the new monthly minimum wage. Heng Chivoan

The official monthly minimum wage for workers in textile-related sectors for 2023 was pegged at $198, with Prime Minister Hun Sen pitching in $2 to the total as he did for this year, making it $200.

The increase, from $194 this year, comes as workers in the sectors – including garment, footwear and travel goods – express concerns about spiking costs of food and accommodation.

The Ministry of Labour and Vocational Training made the announcement on September 21, following a final tripartite vote on four possible options: $198, $206, $210 and $213, the latter three being the union proposals.

The $198 option garnered the majority of the votes at 46, followed by the $213 option at five.

The ministry said in a statement that Hun Sen added the $2 for workers due to the impacts of Covid-19 and the Russia-Ukraine conflict, which has caused food prices to jump.

“From January 1, 2023, full-time workers in textile, garment, footwear and travel goods will receive a minimum wage of $200 per month, but during their probationary period workers will receive exactly $198 per month,” the statement said.

Labour minister Ith Samheng told the media after the vote that workers will still receive other benefits like they have in the past, such as the $7 travel and housing allowance per month and the regular attendance bonus of $10 per month.

They also receive 2,000 riel ($0.50) per day for food if they work overtime or in some cases they receive free meals from their workplace with a value of at least that amount.

Workers who have been at their jobs from their second year to their 11th year receive an $11 seniority payment per month. The minimum wage added up with other benefits means a worker receives between $217 and $228 per month in compensation on average.

“The ministry profoundly thanks Hun Sen for adding $2 more to the figure decided by the National Council for Minimum Wage. This will contribute to the livelihoods of workers in textile-related sectors,” Samheng said.

The ministry said workers who get paid based on productivity can earn more than minimum wage but if the amount they produce earns them less than the minimum wage, then employers have to add more to get them to $198 during probation and $200 for those who pass probation.

Asked if she was happy with the new minimum wage, Sok Khom, a worker at a factory in the capital’s Por Sen Chey district, said food prices at markets have already increased greatly, while her fee for her rental unit had just increased by another $5 recently.

“This month, rental fees increased by $5 while the price of goods keeps on increasing. You can imagine. In the recent past, I could feed my family for a day with 10,000 riel [$2.50] but now I spend up to 20,000 riel to buy food for the family per day,” she said. “Frying oil was just 7,000 riel in the past, now it has increased to 12,000 riel and even 10 duck eggs have increased to 7,000 riel. How can I be happy?”

Sok Khom urged the government to find a way to prevent the increases on food prices along with accommodation rental fees if the minimum wage cannot be increased higher than the rate just decided upon.

“Recently, rental fees were curbed at the peak of the Covid-19 pandemic, but now they just increased them recently from $35 to $40,” she said.

Kaing Monika, deputy secretary-general of the Garment Manufacturers Association in Cambodia (GMAC), said the minimum wage increase and the forthcoming implementation of pension payments in the private sector will make additional labour expenses increase by between $10 and $12 for one worker.

This would affect the income earned by the employers, who cannot increase production costs due to competition from other countries.

“We must not forget that we still have to be responsible. Each factory must try more to boost productivity, reduce carelessness in production and lower unnecessary expenses. This is not something easy to achieve,” he said.

Monika called on international buyers to continue to support Cambodia by placing more purchase orders and to agree to buy the goods at a reasonable price in light of the new minimum wage set for 2023.

Pav Sina, president of the Collective Union of Movement of Workers (CUMW) who participated in the voting, told The Post that during the last two years, workers have been hit hard financially by Covid-19. He added that since 2019, workers had lost many benefits such as holiday pay, which were cancelled.

He said, however, that although the increase did not meet the demands of workers, it was the figure that was arrived at by vote majority vote and so must be accepted.

Ministry of Labour spokesman Heng Sour said that although the wage increase isn’t by a large amount it was still better than last year’s raise and noted that the minimum wage in Cambodia is already higher than some other textile-exporting countries.

Sour added that the government would find other strategies to increase the minimum wage for workers in the future, while also trying to make the Kingdom an attractive environment for investors, all of which is intended to improve the living conditions and standards for workers.

Additional report by Samban Chandara.