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Just How Tough Is it to Live On Garment-Worker Pay in Cambodia?

Grant Whittington headshotWords by Grant Whittington
Investment & Markets
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An international team of labor rights groups recently hired a Cambodian research firm to enlighten the government on how much the workers earning nominal wages are spending on living costs. The results, expected to be ready by early September, will give the government reliable data on living costs for the first time, and could trigger a nationwide reform on minimum wage.

The garment industry’s minimum wage — the only sector in the country with a wage floor — is $128 per month, but the industry leaders and researchers are eyeing $177 as the proposed increase to be effective in 2016.

The factories, of course, are fighting the increase in wages, saying an increase in workers’ wages would drive companies outsourcing in Cambodia away to neighboring countries with lower wages like Thailand and Myanmar.

In 2013, the Labor Ministry conducted an independent study on workers’ expenses, but the report was never published. This go-around, the researchers will survey about 700 garment workers across the Southeast Asian country on their current living expenses, local paper Cambodia Daily reports.

The International Labor Organization published a statistics-heavy report that showed detailed numbers on investments, export earnings and wages surrounding the garment sector, but the study didn’t include data on workers’ expenses. Instead, the stats showed the power of inflation and how the hiking costs of living is affecting Cambodia's 15 million residents.

Compared to the U.S., it’s clear to see that average Cambodian workers aren’t flourishing: Consumer prices in the United States are 45.73 percent higher than in Cambodia, yet the U.S. has 693 percent more purchasing power*. Rent prices in the United States are 170.23 percent higher than in Cambodia, but the monthly earnings show that Americans make 1,242 percent more money each month than Cambodians.

When we take a more refined search and delve into each country’s capital cities — Washington, D.C. and Phnom Penh — it’s easy to see the problem. Phnom Penn, where a heap of Cambodia’s garment factories are located, has a relatively high cost of living when compared to the wages being dispensed. The average rent for a one-bedroom apartment in the center of the city costs around $494 while the average monthly salary stands at $307, leaving the average worker out nearly $200 simply for paying rent. In Washington, D.C., rent is $1,865 in a similar location while the monthly wages of $3,862 leaves the average city-goer plenty of spending power.

The cost of living in Phnom Penn is higher than that of Beijing, where every worker is guaranteed a minimum earning of 1,560 yuan, or around $251, a month. It’s also more expensive to live in Cambodia’s capital than Czech Republic’s capital city, Prague, where the minimum wage is $361.
The results of the study for Cambodia are due to come in within the next few months, and the government will likely respond with a new wage once they see how tough it is to live off a measly $128 a month in a country that isn’t particularly cheap.

*All of the statistical data comes from the website Numbeo.com, a website that compares cost of living in every country. The site aggregates user data and user input and claims to be "the biggest Internet database about cost of living." Since the data is based on user input, any information gained from the site could be partially skewed or illegitimate.

Image credit: Wikipedia 

Grant Whittington headshotGrant Whittington

Based in Washington, DC, Grant works as a program assistant at SEEP Network, an international development nonprofit. A proud graduate of the University of Maryland, Grant spent four months post-grad living in Armenia where he worked for Habitat for Humanity and the World Food Programme. Grant is passionate about humanitarianism and finding sustainable approaches to international development. He enjoys playing trivia with friends but is still seeking his first victory - he ceaselessly blames his friends lack of preparation.

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