Cambodia’s garment and footwear exports, 1995-2015 (US$ million). Graphic: Ministry of Commerce

It’s not conventional wisdom to think when wages for employees increase so do profits for businesses. Paul Krugman made a similar argument in his latest New York Times Op-Ed. In it, Kurgman summarizes an argument made in a research study in the USA that found a startling (to many economists) relationship, or lack there of: “There’s just no evidence that raising the minimum wage costs jobs, at least when the starting point is as low as it is in modern America.” So too is the starting point so low in Cambodia that when the government finally allowed last January a rise in the minimum wage for garment industry workers, business did not slow. In fact, business has improved, more jobs have been created, and the overall export of garments made in Cambodia have increased:

Last year, the garment and footwear industry grew by 9.3 percent to $5.8 billion, up from $5.3 billion in 2013. Footwear exports grew even faster, increasing by 23.9 percent to $438 million in 2014 over the previous year.
According to the Cambodian Investment Board, 78 new garment and footwear factories were approved in 2014, with a total value of $452 million of fixed assets. In the first quarter of 2015, 19 more factories, worth a total of $72 million gained approval.
With new factory openings, employment is rising. According to official figures, the total garment worker population increased from 497,200 in 2013 to 580,900 in 2014. During the first quarter, that number hit 605,100.