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)
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