For Migrants, Pull of Higher Wages Still Strong

In a shop in Thailand’s southeastern Chanthaburi province, 23-year-old Cambodian worker Chheng Chhor Laihieng said he had good reason to seek employment outside his home country.

Despite having limited education and possessing no trade skills, Mr. Laihieng said he earns $12 a day selling cakes—a far cry from earning $4 a day as a farmer in his native Tbong Khmum province.

Migrant workers who were prevented from sneaking into Thailand eat food provided by the International Organization for Migration in Poipet City in 2014. (Alex Consiglio/The Cambodia Daily)

“I would have been able to find a job as a garment worker or construction worker, but the money is very little if we compare to what I earn here in Chanthaburi,” he said.

Yan Muon, 30, said he left Cambodia three years ago after working as a fruit vendor and construction worker could not pay the bills. Now, he earns $400 per month at an electronic manufacturing factory in Malaysia.

Mr. Muon said he has experienced better working conditions since the move. “Eight hours of work per day, and free accommodation and affordable food,” he said.

Recent crackdowns in Thailand and Malaysia on hundreds of thousands of undocumented migrant workers—and a sudden surge in Cambodians returning home to apply for passports—have highlighted how attractive neighboring markets continue to be for Cambodian workers, and how disparities in working conditions make migration worth the trouble.

Nearly 2 million Cambodians—many of them unskilled—are estimated to be working in countries across the region, primarily in construction and manufacturing.

Back home, authorities boast of economic growth and reform. But workers and labor rights activists say economic progress has yet to empower blue-collar workers in the country.

Despite the exodus, there is in fact a significant demand for laborers in Cambodia, said Khun Tharo, a project coordinator at Building and Wood Workers’ International (BWI), a global union federation.

It is low wages and the dearth of training opportunities that fail to keep workers here, he said.

“There are a lot of jobs here—there is a lack of workforce in the industry itself,” he said, referring to the construction sector.

According to data collected in a recent survey by BWI, construction workers usually earn about $7 a day in Cambodia. In Thailand, however, workers can expect to pick up about $10 a day.

Worse, there is a lack of consistency in wages in Cambodia. Small subcontractors often pay much less—about $4 or $5 per day, Mr. Tharo said.

Oum Tivorn, a representative for Cambodia Constructors Association, agreed that there were many jobs in the industry, and said Cambodians could earn between $12 and $15 a day if they were skilled, but most were not. Companies instead mostly rely on ready-trained foreigners for skilled work.

Meanwhile, the garment industry has also maintained a steady demand for workers, but needs to raise wages in order to attract staff, said Jayant Menon, a lead economist at the Asian Development Bank.

“As employment in manufacturing is approaching full employment, wages and benefits will need to rise in order to attract workers from the outer provinces to work in Phnom Penh,” he said in an email.

“Wage increases should be gradual, however, and linked to improvements in productivity, as far as possible,” he added.

Currently, the garment industry, which employs about 700,000 people, is the only private sector workforce with a set minimum wage. The government has made incremental increases since 2014 after years of stagnation, following violent protests that turned fatal when police shot live ammunition into a crowd and killed five workers.

The figure has since nearly doubled and currently sits at $153 a month. Wage talks begin this month, and a new minimum is set to take effect in January.

In February, the government announced it was drafting a law for setting a minimum wage across all industries, but a date for a promised public forum has yet to be set. Labor Ministry spokesman Heng Sour did not respond to repeated requests for an update on the draft.

Miguel Chanco, lead regional analyst for the Economist Intelligence Unit, said a national minimum wage could provide a balance between Cambodia’s industries.

“The current system is certainly not ideal as it sucks out workers from other sectors, compelling many to take up work in the garment industry where pay is higher and more secure,” he said.

“That said, a more national minimum wage system would only be an improvement if it is more transparent (i.e. wage hikes are decided on in a transparent manner) and if there is flexibility built into it from province to province,” he added.

In South Korea, Koeun An, a 28-year-old Cambodian construction worker who emigrated two years ago, said he earns up to $2,000 a month laboring at an apartment project, with only a lower-school education and no vocational training.

In Cambodia, he could only find work as a farmer or mechanic, and monthly wages would only reach up to $50 a month.

“I earned almost nothing while I was in the village because we are farmers, and so our source of income is only via farming,” he said. “How can we generate money? It was very difficult for me to look for a good job because I have very limited knowledge.”

Mr. An said an expansive and powerful union presence meant his Korean boss was kept in line. In Cambodia, a tiny fraction of construction workers are members of unions, which currently hold little influence on employers.

“I can’t imagine how I would survive working on a very little income back in Phnom Penh at the garage,” he said.

According to government figures released last week, Cambodia’s booming construction industry saw new projects worth $4.9 billion approved in the first half of this year. The garment sector has seen exports of more than $5 billion annually, and given any opportunity, officials brag of the country’s 7 percent annual GDP growth rate.

Still, the Cambodian economy remains far smaller—and poorer per capita—than the more prosperous neighboring countries to which workers are drawn.

Moeun Tola, executive director of labor rights group Central, said Cambodia’s minimum wage debate needed to expand beyond simply looking at the wage rate and consider protections and benefits in order to make working in the country more attractive.

Cambodian minimum wages should reflect regional living costs, like neighboring Thailand, Vietnam and Malaysia, he said.

Depending on the region, Vietnam’s garment industry minimum wage can be lower than Cambodia’s—ranging between $108 and $157—but workers are looked after, Mr. Tola added.

“Vietnam has a different minimum wage based on the region and a 13-month salary,” he said, referring to an annual bonus. “And they also have free, healthy lunches and…a social net, social protection.”

“Cambodia’s minimum wage [in the garment sector] is $153, but the workers get nothing,” he said.

“In 2014, [the government] found out that the basic minimum living cost should be $208 per month, but the minimum wage is [still] only $153,” he added.

Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, however, said he was baffled as to why Cambodians would choose to work in factories outside the country when they can earn a decent living in Cambodia.

“I don’t understand why,” he said. “We have seen our sector has grown. Actually, it is better for the workers to stay in our industries than to seek work abroad.”

Mr. Loo said that workers may have been able to earn more in Thailand a few years ago, but today’s exchange rate meant that the U.S.-dollar value of Thai wages had fallen.

“When they go abroad, they are attracted to the 300 baht minimum wage. That used to be $10, but now it is $8 or something,” he said.

According to exchange rates listed online, 300 baht equals to about $9, meaning workers in Thailand can earn about $216 per month on a six-day working week. Mr. Loo said such a figure is “easily achievable without working seven days a week in Cambodia.”

“Workers are much better off working in a garment factory in Cambodia,” he added.

Khim Sophany, a 36-year-old garment worker who emigrated to Malaysia, would beg to differ.

Ms. Sophany said she moved from Phnom Penh in 2010 after struggling to survive as a waitress.

In Malaysia, she said she earned a minimum monthly wage of about $250, or $360 if she worked two hours of overtime a day. She said she works a maximum of six days a week, and her employer covers meal costs—something that was unlikely to happen back home.

“I did not want to work in a garment factory in Phnom Penh,” she said. “I heard they don’t have good payment, work overtime, don’t have enough food to eat.”

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