Is Cambodia’s Expanded Minimum Wage Really a Good Idea?

A closer look at a proposal.

Is Cambodia’s Expanded Minimum Wage Really a Good Idea?
Credit: Flickr/World Economic Forum

One hates to be a cynic, but Cambodian politics frequently instills pessimism in those who look at it for too long. The latest reason for doubt came this week when Labor Minister Ith Samheng posted a message on his Facebook page, announcing that the government is in the process of drafting a law that will expand the minimum wage to all formally employed workers. At the moment, a binding minimum wage is only for those working in the garment industry, which will increase from $140 per month to $153 per month in January.

To begin with, this draft law appears to be at the stage of scribbles on a whiteboard. Ith Samheng said that his ministry is looking to create a National Wage Council to recommend changes to the minimum wage laws. Aside from that, not much is known about a timeline for implementation or how it would proceed. The Phnom Penh Post reported that it will be brought in “step-by-step,” most likely to coincide with expected rises in the salaries of workers in different sectors. Last year, for example, the government announced that the salary for state-employed teachers would reach $250 per month by 2018.

Of course, a minimum wage for all workers would be a welcomed development. Cambodia is far from an equal society and a minimum wage would go some way to rectify this. “It should have been done years ago,” William Conklin, country director at labor advocacy NGO Solidarity Center, told me. “Under the labor law, there should be a minimum wage for all sectors, not just the garment industry.” What’s more, he added, Cambodia is the only country in the region without a national minimum wage structure.

It might also have another, unintended consequence. Jerold Waltman’s The Politics of the Minimum Wage provides a fascinating history of the minimum wage debate in the United States. But applicable across the world is his suggestion that campaigners need to focus as much on the moral side of the debate as the material. As one reviewer wrote: “By arguing that all of us, as citizens, have an interest in the vitality of our republic” – or nation – “and consequently the welfare of our fellow citizens, we can renew our commitment to economic policies that support the dignity of labor and the capacities of our fellow citizens to act in the larger project that we call civil society.”

Yet the development of the minimum wage debate in Cambodia, to date, has only really concerned workers in the garment industries (though workers in other industries have formed trade unions and have been known to strike.) The strikes and trade union action have led to a growth in political activism.  Hundreds of thousands of garment workers have protested in recent years, mainly beginning in 2013. For many, it would have been their first taste of real political engagement. It has also meant that many Cambodians have grown accustomed to the mechanisms of trade unions, a well-needed alternative to the exclusive world of Cambodian politics. The extension of such education to workers in other industries would only be a boost to civic and political engagement.

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But, alas, so much for the optimism. Here comes the cynicism. With only seven months to go until Cambodia’s commune elections, and a little under two years until the next general election, one cannot help but question whether any government promise (and at this moment the extension of the minimum wage is just that) is now merely a ploy to attract voters, and whether it is actually on the cards or not. In the prelude to most elections, the ruling Cambodian People’s Party (CPP) is adroit in making half-promises with the explicit implication that they will only come to fruition if the party wins. (One must add to this the question of economic feasibility of raising basic salaries across the board, given the opposition the relatively wealthy garment industry has put up against raises to its minimum wage.)

“It’s a shrewd maneuver politically. It shows the CPP’s adaptability on policies. They have no doctrinal approach; no ideology. They only want to survive,” Sophal Ear, Associate Professor of Diplomacy and World Affairs at Occidental College in Los Angeles, and author of Aid Dependence in Cambodia, said. “The optics are populist, and it makes sense to pander to that segment of the population which traditionally has supported the [opposition Cambodia National Rescue Party (CNRP)].”

Indeed, as I have pointed out before, since 2013 the CPP has been skillful in appropriating the pre-election pledges made by the opposition in an apparent effort to win back the hearts and minds of the Cambodian people (how successfully is the major question over the next two years). But more to the point, the promise of an expanded minimum wage is a direct challenge to the opposition.

“As long as the government makes the minimum wage debate into a universal debate, they can say to the opposition, ‘what’s your proposal?’ And the opposition will… be on the back foot,” Ou Virak,  head of the Future Forum public policy think tank, said. This is on top of the fact that the CPP can actually say, despite the CNRP’s promises at the 2013 election, it was the party that oversaw the rise of the garment workers’ minimum wage from $80 per month in 2013 to $153 next year.

More political points might be earned if the CNRP fails to counter with its own proposal of a minimum wage that encompasses all formal sectors and instead sticks to mainly championing the cause of the garment workers. “The government can accuse the opposition of only caring about political benefit,” said Ou Virak, “because why, if the opposition were caring human brings, would they only care about garment workers?”

Indeed, according to Ou Virak, the CNRP has itself used the minimum wage debate for its own benefit. “They look at a segment where they can try to win votes,” he said, meaning they focus their efforts on the garment sector. Perhaps this is true. In the aftermath of the 2013 election, when Cambodia erupted with protests, it was common to see CNRP politicians and activists take part in strikes by garment workers, who would then show up at CNRP rallies. No doubt, the 600,000-plus garment workers form a core voter base for the opposition, which has taken up the demand for a significant hike on the minimum wage with vigour, but how much the CNRP cares only for potential voters in the minimum wage debate will be seen when it eventually releases its manifesto. In August, a 67-page draft manifesto was distributed amongst party members and was approved by the party’s steering committee this week. When I spoke to Sam Rainsy recently, he told me that it will be released to the public in the next few weeks.

The question now comes down to political will. Conklin estimates that if done properly, which requires engagement with all stakeholders, including unions and employers, then a structure could be in place within a year and a half. Although, this government is known for its dallying, especially when it comes to implementing laws once they have been drafted. But if it is political, predicated on gaining votes in 2018, then one might see a fast-tracked draft by next year. Though, as is the CPP-way, it might be introduced until after the elections, so as to show the electorate what they might be missing out on if they vote the wrong way. “The issue now is to create the most enforceable and least complicated structure… The discussions should be not if but when,” said Conklin. “I hope the government is serious.”