Minimum salary to rise after all

Minister of Finance Vuong Dinh Hue told the 13th National Assembly’s ongoing fourth session last week that after further deliberation the government agreed with proposals to increase minimum salaries and pensions under its control.   

“ The government will ask the top policy-making body to approve a plan to swell minimum salaries for state employees and pensioners in 201,” Hue said.

The plan will be included in a resolution on state budget estimations for 2013 to be adopted later this session.

Under the session’s schedule, this resolution will be adopted on November 11, 2012.

During the session’s October 22 opening, Prime Minister Nguyen Tan Dung said that due to state budget revenue difficulties, “the government has yet to seek a financial source for a plan to raise minimum salaries for state employees in 2013.”

At that time, Hue went further, saying: “There will be no rise in minimum salaries for state employees due to a lack of a financial source.”

Under this plan, proposed to take effect on July 1, 2013, the minimum salaries will be added VND100,000 ($4.8)  per month. Some eight million people, including pensioners and those working in state-owned enterprises and organisations, would benefit from this rise.

Hue said VND20.7 trillion or about $1 billion would be needed for this plan. “This sum is far bigger than the government’s ability in allocating state budget in 2013, when state budget revenues will be very difficult,” he said.

But, the government’s intention for a pay rise has brought smiles to many people. “I feel happy at his words because my salary would be added with an additional VND100,000 ($4.8). My monthly pension is VND1.5 million ($72.1), which is too low. I have to cultivate vegetables to earn extra money,” said 60-year-old Nguyen Thi Mui, a pensioner from Hanoi’s Xuan Dinh commune.

“I think all people enjoying this type of salary rise will be as happy as I am, because though the minimum salaries have been lifted eight times over the past nine years, with each time seeing an increase of VND100,000-200,000 ($4.8-9.6) on average, the market prices have been rocketing and income from pension seems to be too small,” Mui said.

Nguyen Quang Vinh, another retired state employee from Hanoi, said a rise in minimum salary was “good news” amid people’s ever-increasing living conditions. “It is also a solution to stimulate local demand for consumption and production.”