"Walmart, Nike and Others Decline to Back $40 Monthly Wage Hike in Cambodia’s Garment Industry"

Major Western retailers sourcing clothing from Cambodia...are declining to endorse a proposed hike in the garment industry’s minimum wage that amounts to roughly $40 a month...Many Western brands, too, have declined to endorse the unions’ proposal. In These Times reached out to six of the top U.S. and European brands with contracts in Cambodia—Walmart, Nike, Adidas, Levi Strauss & Co., H&M and Gap Inc.—asking for their position on the unions’ proposed minimum wage hike. None of them endorsed the proposal. Walmart and Nike did not respond; Adidas, Levi’s, H&M and Gap all highlighted their support of ongoing negotiations. “They should back labor unions’ proposed wages and they do have a responsibility,” said Irene Pietropaoli, a Myanmar-based consultant on business and human rights. “They are under no legal obligation to do so, but they clearly are key players in this debate and so have an ethical responsibility to show leadership, to influence the government when they can, to use their ‘leverage,’... The Asia Floor Wage Alliance, an international alliance of trade unions and labor rights advocates that focuses on the garment industry, has calculated Cambodia’s “living wage” to be $283 a month—far above what local unions are demanding. However, economic interests get in the way of such a rate, explained Auret van Heerden, senior advisor with the NYU Stern Center for Business and Human Rights and former president of the Fair Labor Association.Suppliers are reluctant to hike wages because, for one, there’s no guarantee their buyers will absorb the higher labor costs. What’s more: garment factories typically operate on short-term contracts, lasting just a few months. If a factory owner decided to unilaterally raise pay, he risks losing future business. A buyer might react by sourcing elsewhere in Cambodia—or by simply finding cheaper labor abroad, in say, Bangladesh or Myanmar. “A lot of the suppliers, privately, are accusing buyers, brands, of being really part of the problem because they’re cutting their prices on the one hand and they’re expecting them to absorb more costs on the other hand,” said van Heerden.