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Buyers Worried About Union Demands, Garment Manufacturers Say

Cambodian garment workers shout slogans during a gathering to mark May Day celebrations in Phnom Penh, Cambodia, Friday, May 1, 2015. Garment workers staged a rally to demand higher wage and better working condition. The placard at right in the background reads: "Demanding the government urgently set up the labor court." (AP Photo/Heng Sinith)

Labor leaders have said workers need a minimum $177 per month to keep up with the rising cost of living in Cambodia.

The Garment Manufacturers Association in Cambodia says unions and their demands for higher wages are rattling the country’s industry and could lead to a decline in buyers, factories and jobs.

Potential buyers from major US companies, led by the American Chamber of Commerce and including Wal-Mart, Target, and New Balance, recently visited the country, where they raised concerns about labor’s demands to more easily form unions under a new law currently being drafted, GMAC says. The delegation also visited Bangladesh, Myanmar and Vietnam.

Labor leaders say they will continue to demand higher wages for workers, who struggle to earn a living wage under the current $128 per month minimum wage, and to demand changes to the union law.

However, Ken Loo, GMAC’s secretary-general, said law will create “chaos” if it is written to unions’ demands.

Unions, however, have fought to prevent the drafting of a law written to help factories, and following meetings with the Ministry of Labor, the law has been changed in parts.

For example, a provision barring union leaders with criminal records has been struck, and now 10 workers in a factory must support a union for its formation—rather than 25 percent of workers in a factory. The required age for union membership has been lowered, from 25 to 18, but unions must still file financial reports for their members, and copy the Ministry of Labor.

Loo told VOA Khmer that the unions’ demands for higher wages are what ultimately could drive factories away. “It means that a goods price increases,” he said. “They could go to other countries that are cheaper than us.”

Labor leaders have said workers need a minimum $177 per month to keep up with the rising cost of living in Cambodia. But GMAC said as many as two thirds of its member factories cannot afford such an increase.

In a recent GMAC survey, 27 percent of member factories said they could increase the minimum wage up to $5 per month. Only 7 percent said they could raise wages higher than that. A full 86 percent of its members expect to see their exports decrease in the second half of this year, as exports drop between 10 percent and 30 percent. And 64 percent of GMAC members surveyed said they have had to reduce overtime or have no overtime available for workers.

Union leaders say that factories don’t want wages to increase because it eats into their profits. “When workers have a small salary, [employers] profit a lot,” said Ath Thorn, head of the Coalition of Cambodian Apparel Workers' Democratic Union.

Yang Sophorn, president of the Cambodian Alliance of Trade Unions, said she is willing to campaign for a minimum wage increase. “I don’t think it would push employers away,” she said. “This is just a method to keep the minimum wage from being increased. We want workers to have a proper salary. It doesn’t have to make them rich, but it has to make them able to live proper lives.”