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Labor Unrest On the Rise in Cambodia

The latest news from Cambodia: Over 400 workers have been fired following strikes and protests. Instead of calming the situation, the mass firing seems to have inflamed tensions, causing a new round of unrest. 16 of the workers are wanted for inflaming tensions, and eight have been captured.

Foreign investment and labor unrest are both increasing in Cambodia as workers demand a bigger slice of the garment and textile industry revenue pie and better working conditions.

Lured by Cambodia’s low minimum wage of $80 monthly, global apparel and textile brands have been boosting their manufacturing activities here. Until the minimum wage was raised in March, workers were paid a minimum of $61 monthly.

China’s minimum wage is now $150 a month. The minimum wage in Bangladesh is only $38 monthly.

Cambodian workers staged protests recently at a factory making Nike products, claiming that their wages cannot keep pace with health care and other costs, and even a recently-awarded health care subsidy is inadequate.

Police fought with protesters to curb the rioters, who threw rocks at the factory and caused other property damage. But the following morning after the protest, most of the 3,500 employees had returned to work at the Sabrina (Cambodia) Garment Manufacturing Company’s factory near Phnom Penh, the nation’s capital.

Unions have been urging strikes because a shortage of skilled workers gives organized labor an advantage in wage negotiations, and in demands for improved safety conditions. The apparel and textile industry labor force stands at more than 300,000.

Cambodian factories are reportedly running at full capacity, and workers are needed to maintain production levels.

Strikes throughout Cambodia by the end of the first week in June this year totaled 48, more than the combined number of strikes in 2010 and 2011. A four-fold increase of strikes was seen last year with 134.

Nike was not the only colossal global brand targeted by striking workers. Also hit this year were Wal-Mart Stores Inc., Gap Inc., Hennes and Mauritz AB, and Puma SE.

Pending an increase in wages and improved working conditions, more strikes may be inevitable.

Cambodia’s garment and textile exports – the nation’s biggest export items – were up 10 percent in 2012, to $4.4 billion.