Continual heated debate around minimum wage increase

July 25, 2017 | 17:08
Increasing the regional minimum wages for early 2018 continues to be a topic of heated debate between the employers and local authorities.
Policy-makers, trade unions, and enterprises face off over this year's minimum wage increase

At the first meeting organised last last month to discuss the increase of the regional minimum wages for 2018, various options for the wage were recommended, including increases of 5, 6, and 6.8 per cent. Specifically, the National Salary Council proposed the highest increase of 13.3 per cent. Thus the maximum wage difference between these opinions was a whopping 8 per cent, giving ample grounds for debate.

Vu Quang Tho, director of the Institute of Workers and Trade Unions, said that according to the institute’s survey results, the living standards of Vietnamese employees are still low and an offset of 21 per cent in the minimum salary would be required to help employees meet minimum living standards. In 2017, the minimum salary was increased by 7.3 per cent, thus the increase of 13.3 per cent for 2018 could be reasonable.

However, a representative of the Vietnam Chamber of Commerce and Industry (VCCI) said that the economy has yet to warrant such a high raise and VCCI would be happy with an increase of under 5 per cent or even keeping wages unchanged.

Regarding the employers, Than Duc Viet, deputy general director of Garment No.10 Corporation, also proposed to keep the minimum wage unchanged in 2018 because there were consecutive increases in 2016 and 2017, with 12.4 and 7.3 per cent on-year, respectively.

“The consecutive increase will make enterprises unable to pay. Thus, lcoal authorities should build a specific route for wage increases based on enterprises’ financial capacity,” Viet added.

A representative of foreign investors, Ryu Hang Ha, chairman of Korcham, said that as of June 2017, South Korean enterprises invested $54.5 billion in Vietnam and became the largest investors in the country. Along with advantages, these investors also face many difficulties, one of which is the constantly increasing labour expenditures due to the increasing minimum wage.

Vu Thi Ha, representative of Drilling Mud Corporation, proposed that local authorities should reduce the frequency off minimum wage increases.

Le Xuan Thanh, deputy general director of the Department of Labour-Wage under the Ministry of Labour, Invalids and Social Affairs, said that the plan of minimum wage increases will be built to benefit both employers and employees.

Besides, Thanh confirmed that local authorities will consider the proposal on reducing the frequency of minimum wage increases.

The second meeting to discuss the minimum wage increase route for 2018 is expected to be organised on July 28.

Since January 1, 2017, the regional minimum wage rate applicable for employees working for enterprises in Region I is VND3.75 million per month, VND3.32 million per month in Region II, and VND2.9 million per month in Region III, and in Region IV it is VND2.58 million per month.

The rates are 7.3 per cent higher than those in 2016.

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By By Ha Vy

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