Cambodia's National Minimum Wage Council voted 47 to 4 last week to hold the garment, textile, footwear and travel goods sector minimum wage at $210 per month for 2027, with Prime Minister Hun Manet later adding $2 to bring the base rate to $212. Workers' representatives had sought $250 after 17 rounds of negotiations.

What did the $2 add-on actually achieve?

Effectively nothing in real terms. The increase amounts to 0.95 percent, while the International Monetary Fund projects inflation of roughly 3.1 percent in 2027. A joint statement from more than 80 unions and civil society organizations, including the Clean Clothes Campaign and the Asian Floor Wage Alliance, calculated that an increase of at least $6.51 would be required simply to keep pace with rising prices.

The unions' 2026 study drew on living-expense data from 422 workers across 28 factories in Phnom Penh, Kandal and Kampong Speu provinces. Key findings:

• 0.95% nominal wage hike vs. 3.1% projected 2027 inflation
• $6.51 monthly increase required to hold purchasing power flat
• Total monthly pay with benefits will range $231.50 to $242.50 in 2027

"The $2 increase therefore fails to achieve the most basic benchmark — it is not a raise, but a real-terms wage cut," the statement said. Khun Tharo, program manager at the Center for Alliance of Labor and Human Rights, called the figure inadequate. "Cambodian factory workers deserve a living wage, not a survival wage," he said, noting that a bowl of rice now costs around $2 and workers cannot cover basics without debt or excessive overtime.

Why did employers resist?

The Textile, Apparel, Footwear and Travel Goods Association in Cambodia (TAFTAG) accepted the compromise after the prime minister's intervention. Deputy secretary-general Kaing Monika told Kampuchea Thmey Daily the industry's priority amid "continued volatility and uncertainty in the global economy" is to "preserve competitiveness, sustain investment and orders, and protect employment for our workers."

Factories had already raised travel and accommodation allowances by $2.50 per month in April to absorb fuel costs tied to Middle East tensions. Employers warned that any further base-rate hike could trigger closures or push buyers toward cheaper neighbouring sourcing destinations.

How does this square with export growth?

Cambodia's exports of garments, textiles, footwear and travel products surpassed $13 billion in the first nine months of 2026, a 7.7 percent year-on-year increase, according to the Ministry of Commerce.

What did the Adidas investigation reveal?

A BBC Sport investigation published Thursday found workers at two Cambodian factories earned less than $1.30 per hour producing Adidas-branded soccer jerseys for Arsenal, Celtic, Liverpool and Real Madrid. Workers reported producing more than 700 items daily, factory temperatures above 35°C, verbal abuse when output targets were missed, and electrical-safety concerns.

"Football shirts can retail for upwards of 100 pounds ($132), but the women in Cambodia making them are not earning enough to pay their rent or feed their families," said Anna Bryher, advocacy lead at UK-based Labour Behind the Label. She pointed to the €8.8 million ($9.9 million) compensation package Adidas CEO Bjørn Gulden is set to receive this year as evidence the brand can absorb a living wage.

Adidas told reporters average net wages across a sample of its Cambodian suppliers sit 34 percent above the Anker Research Institute's living-wage benchmark, and that both flagged factories maintain "heat-management measures" and prohibit harassment. The brand said it conducts roughly 1,200 factory audits annually.

Does the ACT initiative close the gap?

IndustriALL Global Union's Action, Collaboration, Transformation (ACT) program brought Asos, H&M Group and PVH Corp. into a purchasing-practices agreement in 2024, renewed through 2029 in June with a $6 monthly wage top-up set to rise to $9 in January 2028.

Clean Clothes Campaign living-wage coordinator Anne Bienas called the figure insufficient. "With the impact of the tariffs and the war near the border areas, workers are in big trouble, and $6 is not going to help them," she said.

ACT currently covers fewer than a dozen factories out of roughly 1,500 nationwide. IndustriALL textile director Christina Hajagos-Clausen defended the framework: "Our affiliates have been provided with a space to bargain collectively in a way that does not exist in many other places in the region."

The three ACT-affiliated Cambodian unions — CUMW, CCAWDU and FTUWKC — urged all brands sourcing from Cambodia to "engage with us and make substantial commitments in support of negotiated wage increases."

What sourcing decision does this force?

Buyers with Cambodian exposure now face a compliance question that runs past the headline $212 rate. With inflation running above the wage adjustment, the council-set minimum no longer tracks living costs as measured by either the unions' 422-worker study or the Anker benchmark cited by Adidas. Procurement teams will need to document brand-level wage top-ups through ACT or equivalent mechanisms — or accept the audit exposure that comes with a documented real-terms pay cut across the sector.