An in-depth study into Cambodia’s garment industry has revealed that during the pandemic, workers wages decreased leading to a reliance on overtime and crippling debts – issues that continue to plague the sector
Various organizations hosted an event to unveil the findings of an in-depth report into the garment sector in a post-pandemic world, revealing wages have decreased, causing a reliance on overtime and triggering soaring debt.
The Center for Alliance of Labour and Human Rights (CENTRAL), ActionAid, Cambodia Alliance of Trade Union, and Coalition of Cambodia Apparel Workers Democratic Union (CCAWDU) led Sunday’s event, which highlighted the research found in ‘Stitched Under Strain: Long-term Wage Loss Across the Cambodian Garment Industry’.
In early 2020, the Covid-19 pandemic threw the global fashion industry into turmoil as supply chain disruptions, store closures, and lockdowns brought production to a standstill. With their profits under threat, fashion brands took swift action to cut costs.
For garment workers across Cambodia, the consequences were catastrophic as mass suspensions and layoffs pushed workers further into financial precarity. But this was only the beginning of the story.
More than three years on, with the fashion industry well on its way to recovery, the situation for Cambodian garment workers remains dire.
Through interviews with 308 garment workers employed at factories producing for brands such as Nike, Adidas, New Balance, Gap, Levi Strauss, and Puma, the study provides evidence of the daily reality for workers across Cambodia’s garment industry in today’s post-pandemic climate.
In the immediate aftermath of Covid-19, there was momentum towards rebuilding more equitably. The research conducted reveals that instead of recovering from the crisis together, the global fashion industry has once again pushed the costs onto the garment workers who make their clothes.
With the situation for Cambodian garment workers going from bad to worse, their calls to reform the global fashion industry could not be more urgent.
According to a post-event statement, after the four organizations interviewed the factory workers and reviewed various documents, three main findings emerged. Monthly wages for workers have decreased, leading to a systemic dependence on overtime pay and soaring debt.
The research found that at least 25 percent of surveyed workers reported a decrease in monthly take-home pay since 2020, excluding overtime. Despite a legal minimum wage increase of $10 between 2020 and 2023, the majority of surveyed workers earn less now than in 2020 before the Covid-19 crisis hit, the CENTRAL report cited,
In addition, overtime pay decreased by more than 60 percent for surveyed workers from 2020 to 2023. Workers have gone from earning, on average, an additional $36 before the pandemic hit, to an average of $12 a month in 2023. In a country where garment workers were already overly reliant on overtime to supplement their minimum wage, they have had to cope by cutting back on daily food intake and educational expenses for their children, the report added.
At the same time, 91 percent of surveyed workers reported holding at least one current loan, with 70 percent pointing to the pandemic as a direct link to increased debt. Amidst the growing cost of living crisis, workers are increasingly turning to informal loans that carry interest rates as high as 20 percent, with some workers reporting alarming new trends such as borrowing from factory supervisors directly.
Khun Tharo, Labor Program Manager at CENTRAL, told Kiripost, “We found that those brands still get benefits while the situation hasn’t been stable, including Covid-19, for the last three years, but their sales in the international market increased.”
Tharo explained that they viewed that all garment workers faced challenges during the pandemic, including receiving unstable payments, struggling with daily life, and difficulty with financial management, leading to an increase in debt.
In addition, some factories were temporarily closed during the pandemic. Tharo said these are common concerns that brand owners must be responsible for to ensure workers can support their livelihoods.
He added, “This report is additional evidence to urge those factories to restructure any form of policy in terms of purchase and orders because they always give a reason to interrupt and quit workers from their company.”
At the same time, workers’ minimum wage is another element that can support them. Their work strongly depends on overtime pay, so when factories do not offer extra time, their salaries decrease as well.
“We also called for other partnerships, both local and international, to seek for a better possibility to reduce harm from debt because it is a key factor that adds to the negativity of people,” he said.
Mark Chann Sitha, country director of ActionAiD Cambodia, said that during Covid-19, the owners of many brands have improved their business and production. Yet, the livelihoods of workers are increasingly dangerous.
She added that even though they stayed working throughout the pandemic, brand owners should be held to account for providing affordable wages to the workers who produced their products.
Regarding this field of work, the Government plays an important role and requires attention to raise the minimum wage to ensure wages are sufficient for the cost of local needs of workers, including food, housing, education, and other essentials, she said,
The study also provides some recommendations to apparel and footwear brands, the Cambodian Government, the Australian Government, the European Union and the United States to prevent and decrease the research findings.
Source: Kiri Post
This post is also available in: Khmer