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The real price of cheap clothes

Ate Hoekstra Phnom Penh
March 3, 2017

Cambodia's garment industry provides cheap labor that allows for low prices and fast fashion around the world. But the people producing the clothing are struggling to stitch together a living. Ate Hoekstra reports.

Keine Klopause und andere Missstände in Kambodschas Textilfabriken
Image: picture alliance/dpa/M. Remissa

Garment worker Eang Sok Nath often works 12 hour days six times a week. But despite these long working hours and a salary increase early this year, 26-year-old Eang still has trouble making ends meet.

"In January I earned 93,300 riel ($230), but everything has gotten more expensive," Eang told DW. "The prices of vegetables, meat and fish have all gone up. And just before the salary increase, my landlord raised the rent of my room 20,200 riel ($5.00) per month."

Cambodia's garment industry has been under fire for a number of years. In what is the country's largest informal employment sector, workers are subjected to forced overtime and poor working conditions in factories. Several surveys show that the salaries of the approximately 700,000 workers in the garment industry are often too low to provide for a decent life.

Earlier this year, the minimum wage increased from 56,700 riel ($140) per month to 62,000 riel ($153). But the extra 9 percent makes little difference. Also starting this year, workers have been required to pay a monthly contribution to a national health care plan. Although the health insurance could save workers a lot of money when they need medical care, many of them feel like they've had to give up a substantial part of their salary increase.

Kambodscha Streik
Cambodian garment workers striking in front of a factory in 2015 Image: Getty Images/AFP

"For that insurance I need to pay 14,200 riel ($3.50) per month," Phon Chane, who works in a factory in Phnom Penh, told DW. "And when I went to the market during the weekend, I needed to pay 1,000 riel ($0.25 cents) for vegetables that were costing me 500 riel ($0.12 cents) a week earlier. So for me the increase really doesn't change anything," added Phon.

Trying to stretch a budget 

With every salary increase, many workers are in turn faced with an increase in living costs - rent and electricity prices go up and food and transportation gets more expensive.

Phon Chane's situation is not unique in Cambodia. In the past four years the minimum wage gradually increased from 32,400 riel ($80) in 2013 to 62,000 riel ($153) this year. But with every wage hike, landlords also raise their rent and prices of food and transportation go up.

Additionally, the current minimum wage is still far below the 115,000 riel ($285) living wage recommended for Cambodia by the Asia Floor Wage Alliance, a coalition of unions and labor activists.

In 2015, the Cambodian government tried to solve part of the problem by implementing a rent control law, which was intended to ensure that wage improvements are not eaten up by landlords. But enforcement of the law is weak and it hasn't stopped rents from going up. In interviews over the past weeks, several workers said that in January their rent increased by an amount ranging between 12,000 and 20,000 riel ($3.00 to $5.00).

More fashion for less

Workers also say that together with their wage increases, the workload has gone up. Some now have to do the same amount of work with less people than 2 months earlier. In Eang Sok Nath's factory, the targets have gone up.

"If we don't reach the target we will have 4 hours of overtime," she said. "And if we still don't meet the target, we are called by the manager where we receive a warning."

Approximately 600 factories in Cambodia produce clothing and shoes for major brands such as H&M, Adidas and C&A. These brands have announced several times that they support improvement in Cambodia's garment sector.

But much still needs to happen. William Conklin, Cambodia director of the Solidarity Center, a US-based worker's rights NGO,  told DW that fashion brands are partly to blame for poor wages in factories producing their clothing.

"What we see now is that brands squeeze factories and therefore workers," he said. "If you a pay a low price per piece of clothing, that dribbles down to the workers. Workers are now being seen as disposable. That attitude really needs to change."

Thorsten Rolfes, a spokesperson for Dutch clothing chain C&A, admits that much needs to be done to improve wages. "C&A undertook various actions to achieve positive changes in Cambodia," Rolfes told DW. "We are convinced that living wages for the whole supply chain can be accomplished through social partnerships and collective bargaining," he added.

Adidas spokesperson Andre Mendes told DW that the amount of minimum wage is the decision of a Cambodian labor committee, and not one of the brands. "Wherever new and higher minimum wages are set, Adidas requires our suppliers to meet those wages," he said. "We will accommodate any wage increase within our normal sourcing activities."

Cambodia's textile strike escalates