The garment and footwear manufacturers of Cambodia have urged the Government to provide them assistance in handling the huge production expenses that they may have to incur to satisfy all the benefits proposed for the workers by the Prime Minister Samdech Techo Hun Sen.
On 20 August, Hun Sen had announced that the workers would be provided health insurance by their employers in addition to free travel in buses. He had also said that the monthly minimum wage will increase to US $ 168 next year from the existing US $ 153. This will put an extra burden on factory owners.
The Deputy Secretary-General of Garment Manufacturers Association in Cambodia (GMAC), Kaing Monika remarked that all the members of the association were perturbed as the proposed schemes would make it tough for them to stay competitive.
He further added that the garment and footwear makers will have to spend another US $ 10 million every month on the salary of workers and US $ 3.5 million on their medical expenses.
At present, both the employer and the worker contribute 1.3 per cent of the gross salary of the worker to National Social Security Fund. But according to the schemes announced by the Prime Minister, the manufacturers will have to bear all the health expenses of the workers.
Kaing remarked that this will automatically increase the operational cost for the manufacturers. He, however, added that the employers now expect an increase in productivity from employees. “If workers get all the benefits, they will start enjoying their work and this should boost their morale and thereby result in higher productivity,” averred Kaing.
Chan Sophal, Director at Centre for Policy Studies, said that providing benefits like better wages, health insurance and transport facilities will only enhance the production efficiency of the workers.
The slight increase in operating cost will not make the manufacturers think of relocating as the wages are increasing in other countries as well, like Vietnam.
