Cambodian labour unions are struggling and many workers are being laid off amid the pandemic.
By Zachary Frye
Despite Cambodia’s success in curbing the spread of the coronavirus—just 225 official cases have been found so far—many of the country’s workers are finding it difficult to maintain their livelihoods as supply chains falter.
Since the onset of the heath crisis, about 130 Cambodian factories have shut down, impacting at least 100,000 workers. For those that remain employed, not only are factories cutting wages, but workers unions are also facing pressure.
In April, union representative and garment worker Soy Sros wrote a Facebook post to shed light on 88 workers being dismissed from a factory run by Superl, a company based in Hong Kong that makes handbags for international brands such as Kate Spade and Michael Kors.
A few days later, the factory said the workers could keep their jobs, but Sros was jailed in pre-trail detention after being accused of spreading false information and inciting social unrest.
Although she was released 55 days later and the company dropped the charges, the government then brought an additional charge of provocation against Sros. According to reports, this charge still stands. She could face up to three years in jail if convicted.
In a separate instance, Pav Sina, another Cambodian union leader, said over 2,000 labourers with his union had their contracts terminated due to the economic slowdown brought on by the pandemic.
According to garment workers in the capital Phnom Penh, some factories are implementing a lottery system to determine who gets to work.
One laid-off employee, Em Thy, waited three hours outside at a designated location with hundreds of others in order to be selected for a one-time shift.
After not being picked for the day, she told Reuters that the coronavirus was responsible for breaking up two decades of steady work in garment factories.
The garment industry is essential for the Cambodian economy and many working-class families
According to data from the International Labour Organization (ILO), the garment industry is one of the most important sectors in Cambodia’s export-driven economy. In 2018, the garment and footwear (GTF) sector accounted for 74% of the country’s total merchandise exports.
According to data from Cambodia’s Ministry of Exports and Finance, the garment and footwear sector was responsible for over US$7 billion in export value in 2018, by far the largest export industry in the country. Cambodia’s total GDP was just over US$24.5 billion that year.
Cambodia’s garment industry is heavily integrated in global supply chains, with about 78% of those exports going to companies in the United States, European Union or Japan, including many well-known brands such as H&M, Gap and Zara.
For many garment workers in the country, about 800,000 in total, factory work offers both a steady job and a foothold to get out of poverty.
A study published in 2006 with the Institute of Developing Economies noted that despite the shortcomings of the industry, the garment sector contributes to poverty reduction in the country by offering wages well above the international poverty line.
Usually defined as living on less than US$1.90 per day, the World Bank says that extreme poverty in Cambodia fell drastically in recent years. Although 47.8% of the population sat below the poverty line in 2007, by 2018 it was down to 12.9%.
In September 2019, the Cambodian government raised the minimum monthly wage for garment workers to US$190, up eight dollars from the previous pay threshold.
Factories, unions and the government all have roles to play to ensure workers stay afloat during the pandemic
While many workers rely on the industry, the impact of the pandemic has put their standing in the economic and corporate food chains into sharp relief.
Mass layoffs, reduced wages, targeting of union leaders and lottery-style employment opportunities show that in times of adversity, low-level workers are the first to feel pain in Cambodia’s factories.
Although industry at every level is being impacted from the far-reaching economic impacts of the virus, for many factory workers, a missed wage poses the threat of debt and destitution.
In response to the layoffs, the Cambodian government offered a replacement wage of US$40 per month to laid-off garment workers and negotiated a settlement with factory owners in which factories would provide an additional US$30 per month.
The agreement helps bridge the gap from lost wages, but it is less than half of what workers usually receive, putting many families in precarious positions.
At the time of the announcement in April, Far Saly, the president of the National Trade Unions Coalition in Cambodia, characterized the deal as acceptable given the circumstances and urged workers to accept the rate.
Still, for many workers, especially those with families, it is hardly enough to cover costs for necessities. According to data from the National Institute for Statistics, the rising cost of living means a poverty wage in Cambodia is anything under US$88 per month.
For most in Phnom Penh, rent alone can be anywhere from US$30-70 per month. After the government’s announcement of the wage subsidy, one worker who declined to be identified by name said that he would accept the rate even though “US$70 is not enough to buy food.”
A recent survey from a local NGO and the Cambodian Alliance of Trade Unions noted that 73% of surveyed garment workers laid off due to the coronavirus reported they are paying off loans, leading some to eat less. Others say they need to keep their children out of school so they can help earn extra money.
Annual three-way talks on factory wages between the government, union representatives and factories are set to take place within the next several months, and the Cambodian government is currently conducting its own survey to gauge COVID-19’s impact on the country’s garment workers.
While wages have increased steadily over recent years, negotiators representing factory owners are calling for a freeze in wage hikes during the pandemic.
According to The Garment Manufacturers Association in Cambodia, a group representing factories, more should be done by the government to ensure more workers aren’t laid off, with “scores more factories and tens of thousands of additional workers at imminent risk.”
With hundreds of thousands of laid-off workers relying on the bare minimum to get by, and many others facing reduced wages and uncertain job security, the onus is not just on the government, but also on the unions and factory owners to ensure workers are taken care of.
Although the impacts of the pandemic are tough, buttressing the security of workers—many of whom straddle the lines between poverty and the lower-middle class—will not only help families make ends meet, it also helps the economy emerge stronger.