Cambodian Economists Warn $250 Minimum Wage Demand is "Excessive," Risking Factory Relocation

Cambodian economic experts have warned that the demand for a minimum wage of $250 per month is excessive and carries risks, potentially leading to factory relocations. Concerns have been raised that if this demand is pursued without considering productivity, the capacity of businesses, and the investment climate, many factories could be forced to close. Dr. Ki Sereyvath, an economic expert, stated that the demand for a minimum wage of $250 per month is "far beyond the limit" and warned that if implemented, many factories would "close their doors." He explained that neighboring countries, particularly garment-producing nations like Myanmar, Bangladesh, Sri Lanka, Pakistan, and Vietnam, could attract factories due to lower wage levels compared to Cambodia. Specifically comparing with Vietnam, he noted that in many regions, excluding parts of Ho Chi Minh City, the minimum wage is lower than in Cambodia, while Vietnam's productivity is also high. Another economic expert, Dr. Hong Vannak, emphasized that wage negotiations should be based on concrete evidence from both parties, considering inflation, workers' living costs, and employers' capacity. He added that the actual situation of factories, production costs, transportation, logistics, supply chains, and raw material costs must also be examined to determine an appropriate wage level. These expert opinions come as some labor unions are campaigning for a minimum wage of $250 per month by 2027. Currently, five rounds of negotiations are underway through the tripartite negotiation mechanism. Source: Kampuchea Thmey Local