Cambodian garment workers: never paid enough to escape the debt

A report by Cambodian labour rights organization Central and ActionAid Australia and others, published earlier this month, confirms this: 65% of surveyed workers report that their wage in insufficient to support them until the end of the month, which makes them dependent on loans or working extra hours on top of their 48 hour work week. Workers surveyed by ActionAid Australia and Central and a publication by Dutch trade union CNV International provide evidence of this pattern: in the first survey, 91% or the workers report to have at least one loan. 80% of respondents in the CNV study said they have to borrow money in order to pay for fundamental daily needs.

Research shows that the average debt in Cambodia (the highest in the world) is 3804 USD, 18 months of salary for a Cambodian garment worker. Garment workers hold 20% of all loans in Cambodia, despite making up only 5% of the population and despite the sector still being the country’s most important export sector. These high debts create unhealthy levels of stress for workers and their dependents. Minimum wages clearly are not going up fast enough to keep up with the rising cost of living, which means that the wage gap in Cambodia is growing and it’s becoming increasingly hard for workers and their dependents to survive on a wage earned in this sector. Though wages went up quite significantly between 2012 – 2018 (from 61 USD in 2012 to 170 USD in 2018), after 2018 the minimum wage for workers in Cambodia only went up very little – to 204 USD per month in 2024. However, cost of living kept increasing at a fast pace during the same period. If the minimum wage kept increasing at the same slow pace as the past five years (=22 USD per 5 years) and workers’ expenses remain the same (425 USD according to CNV research), then workers would get a minimum wage sufficient to cover basic needs by the year 2075. 425 USD still is nowhere near the Asia Floor Wag living wage estimate for Cambodia, set at 701 USD per month.

The stagnation of wages is a clear sign of the unwillingness of the industry to meaningfully redistribute value in the supply chain. Cambodia’s garment and footwear exports were worth at least 11 billion USD in 2022 and brands who make their products in Cambodia are profitable as ever (H&M’s profit in 2022: 336.8 million USD, Bestsellers’ profit in 2022: 564 million USD, Next PLC’s profit in 2022: 896 million USD). So there is clearly not a lack of value, nor - judging by these brands' websites - a lack of big words on living wages, but a deadly lack of actual willingness to pay a price for labour that does not condemn workers to poverty and extreme indebtedness.

By Anne Bienias