First debate on regional minimum wage 2019

The National Wage Council yesterday opened its first meeting of the year, discussing the regional minimum wage change to be applied next year.- Photo vnexpress.net

The change would affect about ten million people who are working with labour contracts in non-State enterprises.

The council is responsible for studying wage changes and consulting the Government about the annually-changed regional minimum wage. It includes officials from the Labour Ministry, Vietnam General Confederation of Labour (VGCL) that represents employees and the Vietnam Chamber of Commerce and Industry (VCCI) to represent employers.

Currently, the minimum wage is applied for four different regions in Vietnam as follows Region I: VNĐ 3.98 million (US$ 189); Region II: VND 3.53 million (US$ 168); Region III: VNĐ 3.09 million (US$ 147) and Region IV: VNĐ 2.76 million (US$131). The highest rate covers urban parts of Hanoi, Hai Phong, HCM City, Dong Nai and Vung Tau.

The 2018 regional minimum wage is 6.5 per cent higher that that of 2017, equal to VND180,000-230,000 (US$8-10) a month.

At this meeting, vice chairman of VCCI, Hoang Quang Phong proposed regional minimum wage should be kept unchanged.

“Most domestic and foreign employers told the VCCI that next year was not the right time to adjust the minimum wage as they wanted to increase their financial capacity or they wanted to spend funds – which they can arrange – on training and improving employees’ skills to better meet job requirements and increase productivity,” Phòng said.

“The minimum wage should be increased then, in the further future,” Phong said.

Vice president of VGCL Mai Duc Chinh said the labour confederation proposed an increase of 8 per cent.

He said Vietnam’s gross domestic product (GDP) in the fist half of this year increased more than 7 per cent compared with the same period of last year.

“The economic growth is notable and labourers deserve to benefit from the economic development,” Chính said.

He also said that Government decided the 7-per cent increase for employees working in State organisations and enterprises this month, despite its tightened budget.

“Non-State enterprises should consider adjusting wages they pay their employees at least at the same rate as Government did,” Chính said.

Vu Quang Tho, director of the Trade Unions Institute under VGCL, told media that the VCCI’s proposal was not reasonable because the consumer price index (CPI) of this year’s first half increased about 4 per cent compared with the same period last year.

A recent survey by VGCL showed that monthly minimum wage could cover about 92 per cent of minimum living conditions for employees while Việt Nam targeted that by 2020, minimum wage could ensure their minimum living conditions.

“If the wage is not increased next year, it would have to be increased sharply in 2020,” Thọ said.

Addressing the meeting, deputy Minister of Labour, Invalid and Social Affairs cum chairman of the wage council Doan Mau Diep said that according to Resolution 27-NQ/TW on wage reform that Central Party Committee issued in May, 2018, the State would gradually not intervene in the wage policy of enterprises but promote negotiations between employers and employees.

He said that from now until 2020, regional minimum wage must be adjusted to ensure minimum living conditions for employees, especially those who were paid the least.

“When negotiating minimum wage changes, factors such as GDP, labour productivity, salary on labour market and employers’ budget must be taken into account,” he said.

It’s expected that the National Wages Council will have two or three meetings discussing the wage changes before submitting its proposal to Prime Minister Nguyen Xuan Phuc for a final decision.