Cambodian Service Enterprises Are Required To Raise Their Salaries After A Large Number Of Layoffs Are Suspended?

Some time ago, the Cambodian Ministry of Labor issued a circular saying that the negotiations on workers' wages in 2021 will start in July 2020.

However, looking at the current situation of Cambodian factories, most of them are "badly hurt" and are out of work. The announcement of the Ministry of labor also makes people sigh: it's really difficult to open factories in Cambodia in the past two years!

Under the globalization of epidemic situation, OEM enterprises in Cambodia are facing difficulties

According to the spokesperson of Cambodian Ministry of leather and bag, by March 2020, there were altogether 109factories of science, technology and bag making in Cambodia.

But in early June, Prime Minister Hun Sen said that 256 garment factories had been forced to close down or lay off workers, of whom nearly 130000 workers were affected. It can be seen from the data that the affected factories account for one fifth of Cambodia's textile factories and one tenth of the unemployed.

This is a huge number for Cambodia, and the human and financial resources involved are a great challenge to Cambodia. At the moment, the OEM enterprises in Cambodia are facing the huge problem of the global OEM industry, which is almost always exposed under the global OEM industry chain.

In recent years, with the development of the global economy, the profit margin of OEM industry is also narrowing. At present, most factories in Southeast Asia import raw materials from China, and then export them to Europe and the United States after being produced at home.

However, judging from the current situation, European and American countries have been unable to cope with the epidemic situation, and many orders have been cancelled, while Cambodia's factory industry is mostly labor-intensive, and local people have little demand for the products produced by factories.

No orders, product backlog, workers' salaries, utilities In a word, for factories in Cambodia, shutdown is undoubtedly the best and most helpless choice.

But it's not good news for workers.

It is understood that no factory can maintain the order growth in the second half of the year, 8% of the factories are expected to be flat, and 13% of the factories are unable to confirm the order situation. Nearly 80% of the factories expect a 40% - 60% continuous decline. Therefore, from the second half of the year to the first half of next year, the prospect of orders is still worrying. At the beginning of next year, there is high uncertainty in the development of new shoes in the new quarter. Some customers delay the development activities, and the overall expectation is that the new development will decline by about 40%.

According to the survey report, after many factories reduced their production scale, 30% of the factories decided not to stop production in the second half of the year, while the rest of the factories are arranging the whole plant shutdown or applying for partial shutdown. Up to 54% of the total orders are under consideration until the overall scale of production is stabilized.

Looking forward to the second half of the year, the order situation is still unclear. It is worrying that at this stage, the warehouse of international customers and factories still have the previous inventory which has not been sold, which will affect the first quarter or even the second quarter of next year, and it will be difficult to recover the former scenery in the short term.

Minimum wage negotiations will begin and unions expect to break through $200

In 2021, the negotiations on the minimum wage for footwear and clothing workers are in a tense preparatory stage. The labor union representing the labor will propose that the minimum wage be increased to more than $200 next year.

According to the president of the Cambodian Federation of trade unions, meetings have been held among some trade unions. The reason why the trade union put forward the above figures is that they are considered reasonable. It is worth noting that the base salary of workers in 2020 is $190, which is an increase of $8 compared with that in 2019.

These problems may have been tolerated and solved by the factory in the past, but in the extremely difficult period of the factory under the epidemic situation, the behavior of these workers is undoubtedly to sprinkle salt on the wounds of the factory.

In September, however, we should not talk about how much wages should be raised in the next year, and who should not be able to survive.