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EnlargeThe Whtex Garments factory in Phnom Penh, Cambodia, employs about 1,300 workers and mainly makes underwear. More than 90 percent of its products goes to the U.S. But orders are off about 30 percent in the past few months as U.S. buyers scale back, and that has workers worried.
Two-thirds of Cambodia's export earnings come from the garment industry, which employs about 360,000 people — almost all of them women. Most earn less than $100 a month. But in a country as poor as Cambodia, every little bit helps.
Now, even that little bit is under threat.
Even makers of such seemingly recession-proof garments as underwear are feeling the pinch.
Take, for instance, Whtex Garments in Phnom Penh. Six months ago, the factory had more than 500 workers in the packing department alone, manager David Teo says. Now, there are fewer than 300.
Whtex Garments supplies underwear for Wal-Mart, Kmart and Disney, among others. Teo says more than 90 percent of his production goes to the U.S. But orders in the last few months, he says, are down 30 percent.
Six months ago, the factory packed more than 100,000 pieces a day.
"Now, we hardly pack 60,000, 70,000 a day," he says. As for the future, Teo says that he doesn't know what will happen next month — and everyone is worried.
It's repetitive, mind-numbing work. And it doesn't pay much, either. Workers here bring home between $70 and $100 a month — with overtime. Nobody pretends to like the job, but many are grateful for it.
Pou Chan Thon, 28, has been working at the Whtex factory for three years and says she is worried about losing her job. Her parents are farmers, and she sends them about $30 a month. Without that money, she says, they literally couldn't survive.
A few miles away, Sin Sary, 23, irons and folds track suits at Global Apparels. There are more than 3,000 workers at this factory, which manufactures sports clothes for Adidas and Puma.
I'm worried, the young woman says, because there are rumors going around that the factory will be closed or suspend production for a time. She says she doesn't know what she or her family will do if she's laid off.
But she better start thinking fast. Management hasn't told the workers yet, but about 800 are to be furloughed for the next two months, maybe longer. And these two factories aren't isolated examples.
Van Sou Ieng, chairman of the Cambodian Garment Manufacturers Association, says factories are losing orders from a host of U.S. companies — among them, Gap, Levi's, Wal-Mart and Nike. "Everywhere, actually," he says.
He says about 90 factories have already closed or curtailed production in the past few months, and he predicts another 30 will close by the end of March.
But union leader Chea Mony is skeptical. He says unscrupulous manufacturers are using the crisis as an excuse to close factories and move them elsewhere — without compensating workers.
Van Sou Ieng admits a handful of manufacturers have done just that — but only a handful, he says.
Meanwhile, economist Kang Chan Dararot worries about what will happen next. The Cambodian economy, he says, simply can't absorb those now being laid off from the country's two biggest industries.
"Poor families [are] very deeply involved in these two sectors — construction and garment industry. And now, so many people have been laid off. There [are] very grave prospects for … 2009," he says.
It's a future that may involve risky choices for laid-off workers desperate for cash.
Some out-of-work garment workers are already finding their way into karaoke parlors and go-go bars.
On a recent night, two young women working at a go-go bar in Phnom Penh say they were laid off last month. They haven't told their parents — and don't plan to, either. They are hoping to make enough working at the bar to continue sending money back home.
Many in Cambodia believe there will be more women in the same situation if garment orders are reduced further. Some worry the entire industry may be at risk if buyers — and manufacturers — decide to go elsewhere, like Bangladesh, where prices and wages are lower and labor standards weaker.
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