7.3 per cent minimum wage proposal meets qualms

August 03, 2016 | 17:17

(0) user say

The proposal to increase the minimum wage by an average 7.3 per cent in 2017 continues to receive various opinions from Vietnamese authorities.

On August 2, the National Wage Council, comprised of members from the Ministry of Labour, Invalids and Social Affairs (MoLISA), the Vietnam General Confederation of Labour (VGCL), and the Vietnam Chamber of Commerce and Industry (VCCI), settled on an average 7.3 per cent minimum wage increase in 2017 to submit for the government’s approval, according to newswire Vnexpress.net.

Accordingly, the council reached a majority consensus to request an extra VND180,000-250,000 ($8.07-11.21), depending on the region.

According to Pham Minh Huan, Deputy Minister of MoLISA, the proposal is based on the country’s current socio-economic development. However, the VGCL proposed an 11 per cent increase, while VCCI requested a mere five per cent.

Mai Duc Chinh, deputy chairman of VGCL, said that the council was not satisfied with the results because labourers’ living standards in the garment and textile sector were still quite low.

Meanwhile, Hoang Quang Phong, deputy chairman of VCCI, argued that the 7.3 per cent increase would be a challenge for enterprises in general, and small and medium sized enterprises in particular.
Nguyen Xuan Duong, CEO of Hung Yen Garment Corporation, was of the opinion that the raise would have excessive impact on garment and textile enterprises.

In November 2015, the government decided to raise the minimum wage by 12.4 per cent, effective on January 1, 2016, which raised concerns at a number of foreign-invested firms over the competitiveness of Vietnamese labour costs.

Japanese companies were concerned about the big gap between economic growth and the annual salary increase of 15-17 per cent, which placed a burden on businesses in the manufacturing industry.