Labor

Cambodians Risk Their Lives for $160 a Month


Protesters accompanied by Buddhist monks in Phnom Penh

Photograph by John Vink/Magnum Photos

Protesters accompanied by Buddhist monks in Phnom Penh

Phoung Sreymom, 23, is a seamstress in Building 32 of the massive Canadia Industrial Park outside Phnom Penh. She lives with her husband and 2-year-old son in a small room with concrete floors and a corrugated metal roof, part of a housing complex next to the factory where she works. There’s no air conditioning or running water, just a metal basin outside for washing up. She pays $50 a month for the room and electricity, a hefty chunk of her wages.

Sreymom’s regular shift is from 7 a.m. to 4 p.m., six days a week. Her monthly base pay is $85, and she earns 50¢ for each hour of overtime. In a month with lots of overtime she and her husband, a day construction worker, can earn about $300. Besides the $50 room charge, the family spends $8 a day on food—$240 a month. That leaves little to spare, and the price of food keeps going up. Two years ago, fish cost $2.50 a kilogram; today it’s $3.75.

Sreymom hasn’t worked since Dec. 25 because she and hundreds of thousands of Cambodian garment workers, supported by Buddhist monks, joined a union-led strike to raise the minimum monthly wage to $160. The strike was the largest mass action Cambodia’s garment industry had ever seen. On Jan. 3, Sreymom and her husband were standing outside the gates of the Canadia Industrial Park watching other demonstrators chant “increase our wages!” and “better life!” Around 9:30 a.m., military police shot into the crowd, killing at least four and injuring many others. Thirteen people were arrested, including several union leaders, and charged with committing “intentional violence.” It was the first time police had opened fire on protesting civilians since a crackdown on an opposition rally in 1997. “Once again, Khmer people are killing Khmer,” says Nith Pov, another garment worker in the same industrial park. With two key labor activists in prison, many workers have returned to their jobs in recent days. The strike is rapidly disintegrating.

In a country with an annual gross domestic product of just $14 billion, Cambodia’s $5 billion garment industry is a fast-growing and politically significant sector. The value of garment exports surged 22 percent in the first 11 months of 2013 compared with the year before, according to data from Cambodia’s Ministry of Commerce. While the nation remains one of Asia’s poorest, its GDP has tripled in 10 years. Partly as a result of rising labor costs in China, more textile business has moved to Cambodia to serve such clients as Nike (NKE), Adidas (ADS:GR), Puma (PUM:GR), Gap (GPS), and H&M (HMB:SS).

As Cambodia’s textile industry has grown, so have workers’ expectations. Last year 131 strikes occurred, the highest number since the Garment Manufacturers Association of Cambodia started keeping records a decade ago. The textile industry is now the largest employer. Workplace conditions have deteriorated since 2009, with a greater percentage of factories failing to meet safety and health standards and pay workers on time, according to a July 2013 report by the International Labour Organization. Kem Ley, an economist who works with the Cambodian Center for Human Rights, has found that adjustments to the minimum monthly wage since 2000 have not kept pace with inflation.

Hopes for a steep rise in the minimum wage began last summer, when the opposition Cambodia National Rescue Party made the $160 wage one of its main campaign pledges in the national election. But the Cambodian People’s Party, which has governed since the Khmer Rouge were overthrown in 1979, claimed victory in the July election amid accusations of voter fraud. The day before Christmas the government announced it would raise the minimum monthly wage from $85 to $95. Union leaders refused the deal, and the strike started.

Van Sou Ieng, president of the manufacturers association, estimated at a press conference on Jan. 6 that Cambodia’s garment factories lost $200 million during the walkout and that the industry stood to lose 20 percent to 30 percent of possible future orders if international brands and investors concluded Cambodia was a risky place to do business. He said that if the minimum wage were raised to $160, layoffs would follow.

Ee Sarom, executive director of Palm Tree Leaf, a nongovernmental organization that works on urban poverty in Phnom Penh, counters that factories could afford the $160 wage were they not obliged to pay the government bribes. (The country ranks 160th out of 177 countries on the 2013 Corruption Perceptions Index prepared by Transparency International.) Says Sarom: “The government has given up trying to win the popularity and trust of the people and now resorts only to intimidation.”

The bottom line: The recent garment workers’ strike in Cambodia, the largest in the industry’s history, may cost manufacturers $200 million.

Larson is a Bloomberg Businessweek contributor.

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