The Policy Process on Minimum Wage Setting in a Developing Country: The Case of the Garment Industry in Cambodia

This paper begins with a brief narration about wage protests in the Cambodian garmentindustry, which broke out and became widespread in December 2013, and eventually resulted in aserious crackdown in January 2014. In an attempt to understand what went wrong in the wageprotests in Cambodia’s largest industry, the authors delved into the minimum wage policy andrealized that at the dawn of the protest, the minimum wage of garment workers was revised andset at US $100. However, the revised wage did not stop the protest, so the authors investigatedthe policy process of the garment industry minimum wage revision by inquiring about threeimportant questions: (1) does this wage policy deliver what it intends to achieve; (2) why doworkers continue to protest against this wage decision; and (3) how could the crisis be resolved?The authors reviewed the literature of the minimum wage and news from local and internationalsources to analyze what motivated the wage protest and how it evolved. The analysis isorganized and explained systematically by using the extended policy analysis model amended byBill Jenkins (1978). The result of the analysis leads us to conclude that the recently set US $100minimum wage did not achieve the general policy objective or the state’s interest of maintainingattractive investment conditions in garment industry. The failure is attributed to the unfulfillment ofworkers’ socio-economic needs and interference of political interest in the wage protest. Throughreview and analysis, the authors conclude that the wage protest was captured by politics becausethe opposition party in Cambodia was able to rhetorically argue against government aboutcorruption, collaboration between government and employers, and monopsony practice by theGarment Manufacturers Association in Cambodia (GMAC)