Employers thrash out stance on minimum wages

Employers thrash out stance on minimum wages - illustration photo

From April 1, the Ministry of Labour, Invalids, and Social Affairs (MoLISA) will conduct a survey of over 2,000 enterprises on labour issues, wages, and minimum living standards, with the results to be used as a basis for determining the direction of regional minimum wages from next year.

In preparation for any changes, last week the National Wages Council organised a meeting to discuss the adjustment of regional minimum wages. The Vietnam General Confederation of Labour proposed an increase of 7 per cent, with the decision to be applied from July 1. However, other experts and labourers seek an increase of 10 per cent, and no final proposal was made.

After the meeting, the textile, garment, and footwear business communities were bursting to discuss what they would see as a reasonable figure for a wage rise because they know that their opinions, which are representative of sectors using the largest labour force, would be an important basis for any final decision.

The union chairman at a leading South Korean footwear manufacturer in the southern province of Dong Nai, which boasts nearly 40,000 employees and is a Nike manufacturer, told VIR, “Manufacturers consulted each other and agree that an adjustment is necessary, and a reasonable adjustment level would be 5 per cent.”

The chairman explained that last year’s pandemic problems were one reason for choosing that figure. “In 2021, the operations of major manufacturers were frozen for several months. In addition, manufacturers had to shoulder a lot of burdens, such as the cost of maintaining the stay-at-work policy, as well as the cost of preventing and controlling the pandemic, and the fluctuation in fuel prices,” he said.

According to the chairman, the average income of the company’s employees is VND9 million ($390) each month.

“We agree with a periodical regional minimum wage increase, but we do not agree that the adjustment must be high enough to foster employees’ lives,” he added. “The change needs to be calculated on the basis of the consumer price index, labour productivity, and the manufacturers’ health.”

Responding to the proposal to increase wages, Hoang Quang Phong, deputy chairman of the Vietnam Chamber of Commerce and Industry (VCCI) said that businesses have been focusing on recovering production that has suffered during the pandemic; thus the adjustment level should be harmonious for the benefit of both employees and employers.

At the meeting last week, a representative of the Institute of Workers and Trade Unions revealed that it organised a wide survey last year about the pandemic’s impact on workers’ lives.

The results showed that 21 per cent of surveyed workers said they had to eat more instant noodles, and 48 per cent have reduced their daily meat intake. In addition, 22 per cent have had to call for food support from family members and 11 per cent have been forced to borrow money from relatives.

Any wage adjustment is not only an urgent solution to support employees but also matches the government’s plans. As per Resolution No.27-NQ/TW dated four years ago on reforming salary policy for cadres, civil servants, the armed forces, and other employees, from 2021 the state will periodically adjust regional minimum wages on the basis of recommendations from the National Wages Council.

Employers are entitled to implement a salary policy on the basis of negotiations and agreements between the employers and the employees, as well as the companies’ union.

The regional minimum wage has not been adjusted over the past two years and is still based on Decree No.90/2019/ND-CP, which became effective at the beginning of 2020.

Currently, the minimum wage for workers in Region 1, which covers Hanoi and Ho Chi Minh City’s urban areas, is maintained at VND4.42 million ($190). Region 2, covering the two cities’ rural areas along with major urban areas in the country like Can Tho, Danang, and Haiphong, is VND3.92 million ($170).

In Region 3, featuring provincial cities as well as Bac Ninh, Bac Giang, and Hai Duong provinces, employees will earn at least VND3.43 million ($150) every month, while the rest of the country in Region 4 are earning a minimum of VND3.07 million ($130).