Arnaud Darc
Three figures are before the National Council for Minimum Wage: $210, $225.30 and $250.66. The law does not let anyone set the number; it is weighed against seven criteria, voted on, and issued by the Minister, and the Government has added to the Council’s figure every year since 2019. On the Ministry’s own data, two criteria are positive and five are neutral or negative; the disagreement is how they are weighed. I sit on the Council for IBC and I explain the arithmetic, where the evidence conflicts, what my position asks of workers, and why I will propose that each side’s calculation be published with the decision.
Who Decides Cambodia’s Minimum Wage?
Three proposals. Seven criteria. An employer representative on the Council explains the choices behind the number.
Two hundred and ten dollars. Two hundred and twenty-five dollars and thirty cents. Two hundred and fifty dollars and sixty-six cents. Those three numbers have been in a room at the Ministry of Labour since 1 September, and on Monday they go back in. Most of the country has heard them. Very few people have been shown how any of them is made.
I sit in that room. I am a member of the National Council for Minimum Wage for the International Business Chamber, and through it I speak for hotels and restaurants, a sector the garment wage does not cover by law but that follows it in practice. I am also an employer, in Cambodia since 1994. I spoke once in this round, on 18 September. Everything below I said there, or comes from a document tabled there. My position is at the end; the arithmetic comes first, because most people have never seen it. Read it knowing where I sit.
The law does not hand the number to any one party. The Law on Minimum Wage of 2018 gives the Council seven criteria to weigh. Three are social: family situation, inflation, cost of living. Four are economic: productivity, national competitiveness, the labour market, and the profitability of the sector. The Council is fifty-one people, seventeen each for Government, workers and employers, chaired by the Minister. They must agree; if they cannot agree twice, they vote by secret ballot. The Council recommends. The Minister issues the Prakas, and the wage applies from 1 January.
One more step is in the record rather than the law. Every year since 2019 the Prime Minister has added to the Council’s figure, by five dollars, then three, then two a year, including the two years the Council held the wage flat. Last year the Council proposed 208 and the final figure was 210. That is not a flaw in the mechanism. It is how the decision has been shared in practice.
So what did the criteria say this year? The figures are the Ministry’s, from the presentation it tabled to the Council on 1 September.
Inflation: the method uses the projected rate for the year the wage will apply, and for 2027 the Ministry of Economy and Finance projects 2.6 percent. Productivity: the sector’s labour productivity grew 3.5 percent a year on average over the past decade, and the Council has by convention, not by law, split that gain equally between workers and employers, so 1.75 percent. Those two alone would add about 4.35 percent, roughly nine dollars.
The other five are neutral or negative. Family situation: 4.1 people per household, 2.0 earners, a ratio of 2.0, unchanged since 2019. Cost of living: 210 dollars sits above the Ministry’s two-person minimum by 19.30 in Phnom Penh and 43.30 in other towns. Competitiveness: export growth slowed from 22.3 to 6.2 percent between the first halves of 2025 and 2026. Labour market: approved investment projects fell 26 percent and the jobs they promised 37 percent. Profitability: the sector’s operating surplus, as a share of what it produces, fell from 47.4 to 41.2 percent.
The employer representatives put a figure on each of those five. Most of the weight sits under competitiveness, where their file counts exchange rates, the change in the social-security contribution ceiling, market access and the business environment together; the rest is profitability and the labour market. Family situation and cost of living get zero. Together they offset the positive 4.35, and a little more. Their own note calls those weights calibrated, not calculated, and so do I. The exact figures are the employer group’s filing to the Council, and I will not publish another bench’s paper on my own; that gap is part of what the one-page disclosure I propose below would close. On their reading, the data say which way each criterion points; the weights are a judgement about how much each direction matters, and reasonable people weigh them differently: the majority of worker representatives, from the same data and the same seven criteria, reached plus 15.30 dollars. Seven unions led by CATU reached plus 40.66 on a needs basis, and 125 civil society organisations endorsed that figure on 18 September.
That is the core of the disagreement. Everyone in the room has the same criteria and the same data. The argument is how much the negative criteria weigh against the positive ones, and how the social criteria should be measured: by the Ministry’s survey of what workers earn and spend, or by the workers’ own account of what a household needs.
Where the evidence disagrees, it should be stated rather than resolved.
The first is inflation. The 2.6 percent is the projection for 2027, which is what the method uses. But the same page of the Ministry’s presentation is titled “Variance Between Actual and Projected Inflation Rates.” The Asian Development Bank expected 2.8 percent inflation for 2026 in April; by September, after the fuel shock, it expected 4.7. The method does not go back and compensate for the 2026 miss. That is a real gap, and it is the unions’ strongest technical point. It matters more than it looks, because the positive and negative criteria are close to balance, and every quarter-point on the 2027 projection moves the sum.
The second is what workers have against what they spend. The Ministry surveyed 1,198 workers this year and found average total monthly pay of 315.60 dollars, of which 40 dollars is overtime, against average monthly spending of about 208 dollars, a surplus of 107.70 dollars a month. The unions’ research says a worker’s earnings cover about 60 percent of household expenditure, and one union leader put basic household needs above 500 dollars a month. These are not the same measurement. One compares a worker’s pay with that worker’s spending; the other compares one worker’s earnings with a whole household’s spending. And what people spend is not always what they need: low spending can mean meals skipped and purchases put off. And the Ministry’s two earners per household is an average, not a fact about every household. Both surveys can be true. Neither settles it alone.
Then there is the evidence that household arithmetic does not answer. The civil society statement cites a survey series in which daily calorie intake per worker fell from 2,521 in 2022 to 2,162 in 2024 to about 1,985 this year, below the threshold used for the food-poverty line. Calories are counted per person. The number of earners in a household does not change what one person ate. If that series is sound, it is the most serious fact in this round.
Which brings me to the statement of 18 September.
It asks for 250.66 dollars, and it does not show that figure against the seven criteria; it endorses a union letter I have not seen published, and the method may be there, but what has been published is a needs figure without the arithmetic the mechanism runs on. The majority of the worker representatives did that arithmetic: their 225.30 was built from the Ministry’s data and the seven criteria, and they said so. That is a figure the Council can weigh. A needs figure with its method attached could be one too.
The statement also asks the Government to publish the data and assumptions behind its figures. I would go further, and I will propose it in the Council: that with each decision it publish one page showing the figures used, the weight each side applied to each criterion, and what remained uncertain, the employers’ calculation included.
The same standard applies to the evidence the statement relies on. The 2025 study that found 287 dollars of take-home pay against 391 of household spending, and the survey series behind the calorie figures, are not named. Comparable evidence and open methods, from everyone. The calorie series in particular deserves to be tabled, through the worker representatives, in the room where the seven criteria are weighed. That is where it would do the most good for the workers it describes.
The wage line is never alone, and in 2027 several other lines move at once. Employer social-security contributions are 5.4 percent of the contributory wage, and Sub-decree 32 of 2021 schedules the pension share to double from October 2027, taking that to 7.4, subject to an implementing sub-decree not yet published; the employer weighting above counts only this year’s ceiling change, not the October step. Add the 2.50-dollar allowance paid since April, an Occupational Safety and Health law with no cost estimate yet, and energy prices doing what the Ministry of Economy and Finance said on 21 August they would.
There is one cost both sides already agreed on. A year ago the employer and worker representatives of this same Council sent a joint proposal to the Prime Minister on informal customs charges of 160 to 190 dollars a shipment, roughly 1.5 percent of the minimum wage bill. It was referred to the Ministry of Economy and Finance. A year later, employers report no measurable change. As co-chair of the Government-Private Sector Forum’s working group on law, tax and governance, I am taking it to the Deputy Prime Minister and Minister of Economy and Finance, and I will report back to the Council. If that cost comes down, it creates room a wage decision alone cannot.
The Minister said at the 21 August workshop that the wage for this sector “also has effects on a number of other sectors.” Mine is one. The 2018 law already covers hotels and restaurants; only the implementing Prakas limits it to textiles, garments, footwear, travel goods and bags. Formal hotels and restaurants follow the garment figure anyway, because it is the reference price for labour. That sector, on the Ministry of Tourism’s figures for January to August, has lost 44 percent of its international arrivals against last year, and air arrivals are down 25 percent. Its wages average about 226 dollars a month on the ILO’s tabulation of the labour force survey, and nine workers in ten are informal. Whatever the Council sets lands there too.
What follows is my view.
On my weighting of the seven criteria as presented, the five offset the two and a little more this year, and that was my position on 18 September for the International Business Chamber: no increment on the criteria, and a request that the Council weigh the year’s costs as one picture, against the sectors that absorb the spillover.
The trade-off should be said plainly. Restraint on the wage line costs purchasing power now. A wage above what the sector can carry costs jobs later. I cannot tell you the wage at which orders leave; nobody in the room can. What I can say is that on the Ministry’s figures the sector’s operating surplus, as a share of what it produces, fell six points in 2026, and the investment pipeline that creates jobs is down by a quarter, and I would not add to labour cost on a falling surplus share. That is a judgement about risk, and it asks workers to carry the cost of it now. What softens it is real but limited: the 2.50-dollar allowance continues, and the customs cost, if it comes down, is room for the next round.
My position is my weighting of the seven criteria, and it does not depend on what happens after the Council recommends. The final figure has been higher than the Council’s every year since 2019; whether that happens again, and by how much, is not the Council’s decision. The route to higher household income that I can defend this year runs through the costs that are not wages, and through jobs, which is also what the Minister said on 18 September.
Two things would change my position: the calorie series published with its method and holding up, or a material upward revision of the 2027 inflation projection the Council uses. If either happens, I will say so.
On Monday the three numbers go back into the room. Most of the people whose wage it is will never sit there. The least they are owed is to see the arithmetic, and to be able to argue with it on the evidence. That is what I have tried to give here, from where I sit.
Arnaud Darc
Member, National Council for Minimum Wage, for the International Business Chamber. Co-Chair, Government-Private Sector Forum Working Group D. The views expressed are the author’s own.
Sources: Law on Minimum Wage, Royal Kram NS/RKM/0718/015 (2018), Arts. 5, 12, 16; Prakas 155/26 (Council composition). MLVT, “Update on Economic Situation and Minimum Wage Adjustment Criteria,” 1 Sept 2026, pp. 28, 29, 31–33, 46, 51, 81, 84. MLVT notifications of 14 and 18 Sept 2026. Employer Explanatory Note on 2027 Adjustment Factors. Ministry of Tourism, Statistics Report, August 2026. Sub-decree 32 (2021), Art. 34; Prakas 170/22. Notification 013/26. Civil Society Joint Statement, 18 Sept 2026. MLVT release of 21 Aug 2026 via Kampuchea Thmey. CamboJA, 13 and 19 Sept 2026; Khmer Times, 18 Sept 2026; Kampuchea Thmey, 21 Aug 2026. ADB, Asian Development Outlook, April and September 2026. CLFS 2025 as tabulated by ILOSTAT (hospitality wage and informality). Prakas 214/25 and press record for prior-year decisions.
