UN agency calls on global clothing brands to help Cambodian manufacturers

As the New Year starts, Cambodia introduce the new minimum wage for workers in the garment and footwear industry on this issue the United Nations experts have called on global garments brands to source their products from the country to play a part in helping the industry to engross the cost increases.

The new minimum wage of Cambodian workers is $128 per month. This change is projected by the International Labour Organization (ILO) to increase overall average wages in the garment industry that also include bonuses and overtime, this is from $183 to $217 per month, which increase factories’ wage bills by approximately 18.7%.

“It is important that all sides work together to ensure Cambodia’s garment industry remains economically viable, we call on the global brands to play their part. We have received encouraging signals that key buyers will honor the pledge they gave the Cambodian Government in September.” said Maurizio Bussi, the ILO’s Country Director for Thailand, Cambodia and Lao PDR.

The adjustments in the industry since 2012 has increased the minimum wage $61 per month. At the same time, the prices that Cambodian factories is receiving in their main markets have been declining, according to the United States Bureau of Labor Statistics it is 4.5 per cent 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, 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” said Malte Luebker, the ILO’s Senior Regional Wage Specialist…..

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