Some time ago, the Cambodian Ministry of Labor issued a notice stating that workers’ salary negotiations in 2021 will begin in July 2020.
However, looking at the current situation of Cambodian factories, most of them are “severely exhausted” and have stopped working for production. The news from the Ministry of Labor also made people sigh: the opening of factories in Cambodia in the past two years has really It’s too difficult.
Under the globalization of the epidemic, OEM companies in Cambodia are struggling
Previously, according to Han Suguang, spokesperson of the Ministry of Industry, Science, Technology and Innovation, as of the end of March 2020, there were a total of 1,099 manufacturing companies in Cambodia. Clothing, textile, leather bag and shoe factories.
However, in early June, Prime Minister Hun Sen stated that 256 garment factories had been forced to close or lay off employees, with nearly 130,000 workers affected. It can be seen from the data that the currently known affected factories account for one-fifth of Cambodia’s textile factories, and the number of unemployed people accounts for one-tenth.
This is already a huge number for Cambodia, and the human and financial resources involved are a huge challenge for Cambodia. These problems have been exposed under the trend of globalization of the epidemic. OEM companies at the end of the national OEM chain are facing huge tests at this moment. In the global OEM chain, there is a gap between OEM companies and authorized companies. The two countries will always be in an unequal position. This is almost an unspoken rule of the division of labor in the international industrial chain.
With the development of the global economy in recent years, the profit margins in the OEM field have also been continuously narrowing. Currently, in Southeast Asia Most of the factories import raw materials from China, produce them in their own country, and then export them to Europe and the United States.
However, judging from the current situation, European and American countries are overwhelmed by the epidemic and have canceled many orders. However, most of Cambodia’s factory industries are labor-intensive industries, and locals have very little demand for factory-produced products. .
No orders, product backlog, workers’ wages, water and electricity expenses… Calculated one by one, for factories in Cambodia, suspending operations is undoubtedly the best and most helpless option.
But for workers, the shutdown is not good news.
It is understood that no factory can maintain order growth in the second half of the year, 8% of factories are expected to be flat, and 13% of factories cannot confirm order status. Nearly 80% of factories expect a continued decline of 40% to 60%. Therefore, the outlook for orders from the second half of the year to the first half of next year remains worrying. There is high uncertainty in the development of new footwear in the new quarter of next year, and some customers are delaying development activities. The overall expectation is that the development of new models will decline by about 40%. The survey report shows that after many factories reduced their production scale, 30% of the factories have decided not to stop production in the second half of the year, and the remaining factories are arranging full plant shutdowns or applying for partial shutdowns. Overall, about 54% of factories are considering reducing production scale until order conditions stabilize. Looking forward to the second half of the year, the order situation is still unclear. What is worrying is that at this stage, the warehouses of international customers and factories still have previous inventory that has not been sold. This will affect the first quarter and even the second quarter of next year, and it will be difficult to recover in the short term. scenery.
The minimum wage will be on the negotiation table! The union hopes to exceed US$200
The 2021 minimum wage negotiations for shoe and garment workers have entered an intense preparatory stage. The union representing labor will propose to increase the minimum wage to more than US$200 next year. According to the chairman of the Cambodian Federation of Trade Unions, meetings have been held among some trade unions. The union came up with the figures because they thought they were reasonable. It is worth noting that the minimum wage for workers in 2020 is US$190, which is an increase of US$8 from the minimum wage for workers in 2019.
In normal times, the factory may be able to tolerate and solve these problems, but in the extremely difficult period of the factory during the epidemic, the behavior of these workers, It undoubtedly rubs salt into the factory’s wounds.
No one will know until September whether workers will get a salary increase next year, and by how much. But at this stage, perhaps it is time to think about how to keep the factory alive before talking about salary increases. </p
