Thursday, October 27 2016


Pay rises depend on productivity

Update: August, 01/2015 - 09:06

Bui Sy Loi, Deputy Head of the National Assembly's Social Affairs Committee, speaks to Ha Noi Moi (New Ha Noi) about salary reforms.

Will you please ex-plain why work-ers' average wages in Viet Nam are lower than their peers in the region and the world?

It is a universal truth that adjustment of a worker's minimum wage and their basic monthly salary depend on the economic growth rate, labour productivity and consumer price index (CPI) of the country.

For example, in Viet Nam in the first quarter of 2015 there was not much change in our CPI, while the GDP was reported at 6.28 per cent. These two factors are not sufficient for the government to make a decision to increase the worker's salary. That's why, if we want to raise the workers' minimum wage, the only way is to increase labour productivity. But high labour productivity depends on several factors, including the production line, technology, machinery and equipment, labour structure in each type of enterprise and other things.

I have to admit that our labour productivity in the past few years has experienced some positive change. But it is still much lower than in other countries. According to the General Statistics Office (GSO), the productivity of Vietnamese workers stands at an average of $3,515 a year, an 18th of their Singaporean counterparts, a sixth of Malaysia and a third of Thailand.

What makes Vietnamese workers' productivity lower than that of their peers in the region?

The productivity of each country depends very much on the labour structure of each economic sector.

In Viet Nam, productivity in agriculture, agro-forestry and fishery is about $1,351, or 38.9 per cent of the average, while workers in industry and construction produce about $5,302 and services about $5,003.

There are four factors leading to our low productivity.

First, those in the farming, forestry and fishery sectors account for 47 per cent of all workers. Secondly, farmers and workers are not properly trained. Thirdly, equipment used in production is outdated, particularly in processing and manufacturing enterprises. And finally, enterprises' management and administration skills are poor.

According to the World Bank, the quality of Vietnamese human resources is very low compared with that of many Asian countries. How do you respond to that?

The quality of Vietnamese human resources is 3.79 out of 10 points, ranking 11 out of 12 nations that participated in a survey conducted by the World Bank. Meanwhile, South Korea scored 6.91 points, India 5.76 points and Malaysia 5.59 points.

At present Viet Nam has 53.4 million working people age 15 and up. Fourty-nine per cent of them have attended training courses, but just 19 per cent of them attended courses that lasted more than three months.

The Government has adopted a strategy on administrative reform, of which salary reform is an important component. How would you evaluate the implementation of the strategy so far?

Viet Nam is in the process of advancing toward industrialisation and modernisation. Creating a knowledge-based economy and fully integrating into the world economy are the country's next targets after becoming an industrialised nation by 2020.

Salary reform is an imperative for the nation, as high salaries will become important leverage to improve labour productivity and work quality.

Though civil servants' salaries are not high, many people still prefer to work for the Government. Why is that?

In the last 20 years we reformed salary policies twice. However, the life of wage earners across the board has not improved much – particularly for civil servants.

I have to concede that most of them don't live on their salaries, but on income from other sources. This is a factor leading to corruption and ethical degradation of a certain group of civil servants in our society. In addition, the same salary policy is applied nationwide. Salaries are not based on work performance, so how could they motivate civil servants to work harder and try new things?

Last but not least, not many differences in our salary policy system have been made over the last 20 years. We need a real salary reform revolution this time. — VNS

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