Minimum wages in Cambodia’s garment industry, the country’s largest private sector employer, have been raised yet again. But years of rising wages and falling prices paid by international brands are squeezing profit margins of factory owners in Cambodia. Even though Cambodia’s garment workers are receiving annual wage raises, the price international brands pay for readymade garments continues to be low.

US imports of Cambodian garments have been falling over the past few years. But imports by EU countries have risen. Perhaps because unlike the US, the EU grants duty-free access to Cambodian garments. It is important for Cambodia’s factories to compete on more than low labor costs alone. They need to find a way to compete that is also about productivity, skills and values. There are other countries where wages are lower.

Also Cambodia has passed a trade union law in April that doesn’t comply with International Labor Organization conventions. Certain category of workers public servants notably aren’t covered by the law in terms of having rights to form unions. Some of the provisions seem to be overly interfering in the internal operations of the unions. The union law, however, gives employees several added powers, including the right to strike.