People’s Tribunal
on
Asia Minimum Floor Wage,
Cambodia
Presentation: Mass Faintings and
Cambodias wage development
Presented by Bent Gehrt
Worker Rights Consortium
Faintings overview
• Since June 2010 there have been at least
thirty-four separate incidents of mass fainting
by workers in sixteen garment and footwear
factories in Cambodia. In total, almost 2400
workers have fainted
• Most recent incident occurred in January
2012.
Monthly fainting incidences
600
500
400
300
200
100
0
Potential causes
•
•
•
•
•
Chemical Exposure
Excessive Overtime
Excessive Heat and Inadequate Ventilation
Restrictions on Toilet Access
Other Occupational Safety and Health Hazards
(poor ergonomic quality of the chairs with which workers are provided,
inadequate lighting, unsanitary toilet and facilities, and excessive noise
levels)
• Lack of Access to Adequate Healthcare
• Psychological Factors
(Collective Panic and Work-Related Stress)
• Malnutrition
Mass Psychogenic illness?
Management believes the cause of the fainting is
that the workers didn’t get sufficient food (report
page 2)
Mam Vannak,
Secretary of State at the
Ministry of Labor
Minimum wage and Inflation
2000 - 2012
Year
Inflation %*
Minimum wage**
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-0.8
0.2
0.1
1
3.9
6.3
6.1
7.7
25 -0.7
45
45
45
45
45
45
50
50
56
4.2 -0.1
5.6
1.9 21.5 13.9 17.2 15.8 20.3
56
4
6.4
5.6
3.6
61
61
66
66
Development of the real wage (fall in percentage)
0.0 -0.8 -0.6 -0.5
0.5
What the minimum wage should be just to catch up with inflation
45.0 44.6 44.7 44.8 45.2 47.0 49.9 53.0 57.1 71.3 70.8 73.7 78.4 82.8
* Source: IMF World Economic Outlook
** Source: Prakas 17, 724 and 32
Potential Fainting Threshold?
When the real wage decrease by more than 14%
from the 2000 wage
Workers income and expenses
• Wage in 2011
61 USD/ month
• Rent and utilities:
• Remittance
• Personal expenses
8 USD/month
17 USD/month
5 USD/month
• Remaining for food 31 USD/month or 1 USD per
day (4000 Rial)
(Breakfast: 1000, Lunch 1000 and dinner 2000)
Lunch
The 500 Rial soup
How is it possible to sell a vegetable
soup for 500 Rial (12 US cent)
• Food prices are high. For instance Chicken costs
21.000 Rial per kg and cabbage costs 2300 per kg.
• Recipe for cheap soup:
– Approach vegetable vendors in the evening to buy the
vegetable that will become unsellable due to
impending rot the following day and buy these at
discount.
– Add tiny amount of protein in the form of small fish or
chicken carcasses.
– Add plenty of water
Vegetables at the market
Soup Sample
Lunch Calories
•
•
•
•
Soup:
average weight: 200 gram
Average calories 76 Kcal/ 100 gram
Rice
Average weight: 250 gram
Average calories: 168 Kcal/ 100 gram
• Total Calories: 2x76 + 2.5x168 = 572
• Total Calorie needs 2200/3 =
733
• Deficit =
(161)
Breakfast
Rice 200 gram = 336 Kcal
Pork (estimated) 50-60 Kcal
Total (including vegetables)
approximately 400 Kcal
Deficit: 733 – 400 = (333)
Workers who live at home
• Eats better food as they eat breakfast and
dinner at home.
• Eat fruit more often as they have fruit trees in
the garden
• Spend 2000 Rial for lunch
• Unless they are really broke, they never eat
the 500 Rial soup as it “does not give them
strength”
• No one in the sample group had fainted
Conclusion re faintings
• Strongly related to the reduced real wage of
the workers.
In particular there has not been a proper
correction for the high inflation of 25% in 2008.
• 5 USD health allowance insufficient in
correcting the fall of real wages
Is a higher wage affordable?
Comparing: Zongtex Garment Mfg vs Beauty
Apparel
Zongtex Garment
• Key buyer is Global Gold (Derek Heart), which is
sold at Kohls Department store and Kmart – in
other word cheap mass retailers.
Beauty Apparel
• Key buyers are Adidas and Gap
1410 Broadway Floor 8
New York, NY
• Adidas 2010 revenue was 11.99 Billion Euro
according to Wall Street Journal
• Adidas Workplace Code of Conduct re Wages
& Benefits
“Wages must equal or exceed the minimum
wage required by law or the prevailing
industry wage, whichever is higher”
Wage comparison
Zongtex Garment Mfg
Wages are 63 to 68 USD per month
Beauty Apparel
Wage is 61 USD per month
Adidas said its factory workers earned […] considerably
more than the minimum wage (Guardian, February 2).
Doing just fine: Brands profits after tax
in millions of USD
2006
2007
2008
2009
2010
Adidas
483
551
642
245
567
Gap
778
867
967
1100
1200
Nike
1490
1880
1490
1910
2130
Puma
263
269
233
80
202
• Source: Marketwatch, Wall Street Journal
Comparing Cambodia and Vietnam
minimum wages (2005 to 2012) USD/month
100
90
80
70
60
Cambodia
50
Vietnam (Hanoi+HCMC)
40
Vietnam (2nd tier cities)
30
20
10
0
2005
2006
2007
2008
2009
2010
2011
2012
Vietnam expects higher export of
major products
• The country's textile and garment sector attained an
export turnover of over 14 billion USD in 2011,
enjoying a trade surplus of 6.5 billion USD.
• Le Tien Truong, Deputy Chairman of Vietnam Textile
and Garment Association and deputy general director
of Vietnam Textile Corp. (Vinatex), explained that the
healthy market forecasts and the confidence gained
from customers were the main reasons behind the high
export growth of textiles and garments last year.
Source: http://www.vtgvietnam.com/marketnews_detail.asp?serno=311