Minimum wage hike will sustain investment competitiveness
Minimum wage hike will sustain investment competitiveness
The new minimum wage set by the Royal Government came into effect this month. This will enhance productivity and foster harmonious professional relations between employers, unions and stakeholders, said a top government official on Friday.
Speaking at the inauguration ceremony of the production building at the Seeds Garment – Cambodia factory in Phnom Penh, Nguy Rith, Secretary of State at the Ministry of Labor and Vocational Training, said that this in turn can lead to business expansion and the creation of more job opportunities for Cambodians—goals that the Royal Government of Cambodia prioritizes.
Congratulating workers on the implementation of the new minimum wage for 2025, Rith said, “The policy of increasing wages annually reflects the care of the Royal Government of Cambodia under the leadership of Prime Minister Hun Manet. This is in addition to the many other benefits that workers receive, particularly the social protection that serves as a valuable resource for the well-being of workers and employees.”
He also called on all relevant parties, especially employers and unions to consider the overall interests of workers, employees and to properly fulfill their obligations in accordance with applicable state laws.
The new minimum wage of $208 for workers in the textile, garment, footwear, and travel products and bags sectors was welcomed by economic experts saying that the move will help Cambodia maintain its competitiveness in attracting investment.
A statement issued by the Ministry of Labour and Vocational Training (MLVT) quoted Ky Sereyvath, a researcher in economics at the Royal Academy of Cambodia (RAC), saying that the 2025 minimum wage “aligns with the global economic situation and the circumstances of investors in Cambodia.”
“The $208 figure is considered reasonable, as it helps Cambodia remain competitive in attracting investment, particularly in comparison with industrialised countries.”
He added that this means that the minimum wage figure is balanced, neither too high nor too low, compared to other countries.
It may be recalled that the new minimum wage for 2025 is $208 per month, an increase of $4 compared to $204 last year.
“In the current economic situation, maintaining the policy of increasing the minimum wage reflects the Royal Government of Cambodia (RGC)’s commitment to supporting workers. However, if the wage rises too high and becomes disproportionate to domestic productivity, it could undermine Cambodia’s competitiveness and negatively impact the flow of foreign investment,” reasoned Sereyvath.
However, he appreciated the government’s efforts to consistently consider the well-being of Cambodian workers by providing wage increases and other benefits.
“Focusing on labour productivity and worker wages is essential for ensuring stable investment and maintaining high competitiveness. I hope that Cambodia’s productivity and investment levels will continue to improve, enabling the government to keep increasing worker wages,” Sereyvath emphasized.
Leang Saroeun, a worker at the Seeds Garment – Cambodia factory, expressed his happiness stating that he is very grateful for the Royal Government and the Ministry of Labor for the wage increase.
Talking to Khmer Times, he said, “I will receive the new minimum wage of $208 this month. Although it is a small amount, but this wage is crucial for my livelihood and will provide additional monthly income to support my family, alongside the other benefits I am already receiving.”
According to a report by the Ministry of Commerce, Cambodia exported garments, footwear, and travel goods worth $12.22 billion during the first 11 months of 2024, up 24.9 percent year over year.
The report said that garments worth $8.94 billion were exported, an increase of 25.8 percent year over year. Footwear products worth $1.5 billion were also shipped to international markets, up 24.3 percent.
In addition, travel goods equivalent to $1.78 billion were exported during the same period, up 21.5 percent.
