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New Minimum Wage Goes into Effect

PHNOM PENH: This month, more than 700,000 factory workers will receive $204 for their labor, a $4 increase from their monthly wage in 2023.

With over half of Cambodia’s factories located in and around Phnom Penh, the cost of living for workers is higher than average. Many of them were forced to take out microfinance loans during Covid-19 and need a wage increase more than ever. Majority of factory workers are women under 30, and many of them campaigned for a $215/month minimum wage ahead of the discussions, which began in August.

Over the course of about 20 meetings factory owners met with union representatives to discuss this year’s minimum wage, with the government presiding. Ultimately, factory representatives agreed to a $2 monthly raise, with the government adding another $2, bringing the total to $204 per month for 2024, far lower than the initial proposal from those working in the factories.

Speaking to a crowd of nearly 20,000 workers in October, Prime Minister Hun Manet said that the increase should be celebrated. He said that too much of a raise would affect Cambodia’s competitiveness in global trade, which has already taken a hit after the US and the European Union withdrew preferential taxes on exports due to human rights concerns starting in 2020.

Despite all that, according to the Ministry of Commerce, in 2022 Cambodian factories produced garments, footwear and travel accessories valued at more than $10 billion.

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