VietNamNet Bridge - Government agencies cannot agree on a minimum wage, and continue to argue about whether the current minimum wage can cover the basic needs of workers.

Agencies still unable to solve minimum-wage issue

The National Assembly has assigned the government to implement a wage reform program under which the minimum wage will be raised step by step to a level high enough to cover basic needs.

The Vietnam Labor Federation suggested an intensive program implementation method with a 20-30 percent increase per annum, so as to reach the goal by 2018.

Meanwhile, business owners do not support the proposal. 

“We think it is necessary to reconsider the criteria for ‘minimum living standard’,” said Nguyen Xuan Duong, chair of the Hung Yen Garment JSC.

“The labor federation says one worker needs to feed one dependent person. I think it is unreasonable,” he said.

The businessman went on to say that one laborer works for over 40 years on average, and it will be unreasonable to think that he will feed one child for all these 40 years.

“I think one laborer only feeds one dependent person for 18 years, not 42 years, as currently supposed,” Duong said.

If so, the money for one laborer to feed one dependent person during his working life will be just 0.319 of his total wage, not 0.7 as currently applied.

If the inflation rate is 7 percent annually in 2014-2018 as predicted by consultants, the minimum living standard for Zone 1 would be VND2.972 million in 2015, VND3.182 million in 2016, VND3.406 million in 2017 and VND3.647 million in 2018.

As such, according to Duong, the minimum wage average increase in the next three years (2016, 2017 and 2018) should be 8.1 percent per annum. 

If so, the minimum wage would reach VND3.663 million a month by 2018, higher than the minimum living standard of VND3.647 million.

As 2016 is believed to be a difficult year for the national economy, Duong thinks the 7 percent increase should be applied for the year, while the 9 percent increase would be applied for 2018 and 2019. 

From 2019, the wage increase will be calculated based on real inflation rates.

Meanwhile, according to Vu Tien Loc, chair of the Vietnam Chamber of Commerce and Industry (VCCI), the new minimum wage needs to 1) cover currency depreciation 2) be in accordance with annual productivity and 3) have a shorter implementation process to ensure the minimum living standard for laborers.

Therefore, VCCI plans to propose a 10 percent wage increase for 2016, the same as the 2015 increase.

TBKTSG