Cambodians Risk Their Lives for $160 a Month

[geovalin]

By Christina Larson BLOOMBERG/BUSINESSWEEK

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.

Photo Essay: Cambodia's Garment Factory Workers Strike

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.

Story: Cambodia’s Monks Join Battle Over Raising Minimum Wage

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.”

source

http://www.businessweek.com/articles/2014-01-09/cambodians-risk-their-lives-for-160-a-month

[geovalin]

Cambodia’s garment factory workers: Ripe for exploitation

By Albeiro Rodas

Eight days after the crackdown on garment factory workers and opposition rallies in Phnom Penh, Cambodia seems normal this weekend. The national television continues its regular programs showing Thai and Korean soap operas, karaoke videos and news about curious things in the West like the polar freezing in US or “national news” like the January 7′s Liberation Day Anniversary. The crackdown gets some mentions on TV, such as to announce that factories are filing cases in court against trade unions for “incitement to strike, damage to property and assets”.

Cheap manpower has attracted companies from countries like China, South Korea and Vietnam to Cambodia to serve big customers such as Nike, Adidas, Puma, Gap and H&M.

Cambodia has two very important factors to guarantee such cheap manpower: a lot of young people and a large rural population. Eighty percent of Cambodians were living in rural areas in 2009 (NIS, 2009, p.1), while 22 percent of Cambodians are between 15 and 24 years old (Index Mundi, 2013). As poverty is mostly concentrated in rural areas, factory workers are mostly farmers with low levels of education and few options to do other things in their fight to break the poverty line.

Emigration is also high, with Thailand, China, Malaysia and South Korea the main destinations. There is a wave of legal migration through certain agencies promoting domestic servants in Malaysia or construction workers in Thailand. In 2013 Thailand agreed to pay 300 baht per day as minimum wage to employees, approximately 10 US dollars or 40,000 Riel. In Cambodia, many workers earn just $3 a day. However, those working in other countries are not there legally. According to VOA Khmer, 160,000 migrant Cambodian workers are looking to be legalized in Thailand alone, with many working off the books in the sex trade, illegal fishing or construction jobs (Chun Sakada, 2012, para. 1)

(MORE: Civil society groups ramp up pressure on Cambodian govt)

Strikes at Cambodian garment factories are not rare, with conditions so bad and hours so long that mass faintings are also not uncommon. As these workers suffer, Cambodia’s leaders and industrialists are getting rich. A few years ago most of these workers supported the CPP government, but policies of land grabbing and eviction of farmers and now the latest brutal crackdown is further undermining the popularity of the government.

For many the impact would be deeply negative causing a sudden inflation and unemployment. What is true is that keeping a low minimum wage in Cambodia, will attract soon a crisis not only in the garment sector, but in other areas too. Offering cheap manpower to promote foreign investment can be a good thing, but not when the government stands by as its people toil for pittance. At the same time, discontent young workers will tend to look jobs in other sectors such as the tourist industry.

The strike crackdown attracted international condemnation as security forces opened fire on protesters armed with stones asking to earn US$160. It shocked not only human rights defenders around the globe, but also multinationals that are at last becoming more sensitive to the conditions of the workers that make their products. International clothing retailers like Adidas, Columbia, Puma, Gap, H&M and Levi Strauss, said this week that they oppose violence and called on the government to find a peaceful solution to the problem, stating also that workers have the right to work in a safe and secure environment. (Kimseng Men, 2014, para. 5)

The Washington Post has a good article on whether the minimum wage kills jobs or not, saying “it doesn’t appear to worsen unemployment in any noticeable way” (B. Plumer, 2013, para. 2).

In a study by the Center for Economic and Policy Research, it is explained why the increase of minimum wage does not mean necessary an increase on unemployment:

In the traditional discussion of the minimum wage, economists have focused on how these costs affect employment outcomes, but employers have many other channels of adjustment. Employers can reduce hours, non-wage benefits, or training. Employers can also shift the composition toward higher skilled workers, cut pay to more highly paid workers, take action to increase worker productivity (from reorganizing production to increasing training), increase prices to consumers, or simply accept a smaller profit margin. Workers may also respond to the higher wage by working harder on the job. But, probably the most important channel of adjustment is through reductions in labor turnover, which yield significa

source

http://asiancorrespondent.com/118137/cambodias-garment-factory-workers-ripe-for-exploitation/