PHNOM PENH (Reuters) - Cambodia on Wednesday raised the controversial monthly minimum wage for garment workers by 28 per cent, a decision likely to infuriate unions seeking a higher increase and revive calls for strike action.
Cambodia deployed armed troops in the capital in September as garment workers held rallies to revive a campaign for higher wages that had helped to stoke a year-long political crisis.
Sixteen members of the Labour Ministry's Labour Advisory Committee voted for the government-proposed minimum wage of $123, compared with the current wage of $100, which was later raised to $128, starting next year.
Independent unions were pushing for $140.
"I believe that workers will improve their living conditions, factories will be able to pay and production will increase," Labour Minister Ith Sam Heng told reporters.
The growth of the garment sector has been a boon for the fledgling economy, providing as many as half a million jobs and generating $5 billion annually, but frequent protests by increasingly assertive unions, complaining about poor wages and bad conditions, have tested the government's patience.
At stake, if the campaign leads to prolonged strikes, is the possibility of reduced orders from firms that outsource to Cambodian factories, such as Gap, Nike, H & M Hennes & Mauritz and Zara, owned by Inditex.
Two unions, the Coalition of Cambodian Apparel Workers Democratic Union and the Free Trade Union, said that they didn't agree with the new figure and will hold meetings with their members about what to do next.
Joel Preston, a consultant at labour rights group Community Legal Education Centre, denounced the pay rise.
"There is going to be a really strong response from the unions and from the workers. This decision is completely unacceptable," he said.