NA to postpone wage increase

Workers carry out construction work on the Rach Chiec Bridge in HCM City. A planned increase in the minimum wage for State employees is likely to be delayed. — VNA/VNS Photo Hoang Hai

HA NOI (VNS)— The Government is likely to delay its planned increase of the minimum wage next May due to shrinking State budget revenues.

Despite planning to increase the minimum wage from VND1.05 million (US$50.5) per month to VND1.3 million ($62.5) in May next year, deputies at a National Assembly meeting last week proposed delaying the increase.

The move will affect seven million people on the State payroll, as well as retired people.

Finance Minister Vuong Dinh Hue said that because of a decrease in State budget revenue, it was difficult to secure the funds needed to raise the minimum wage, a move which would cost the State VND60 trillion ($3.12 billion).

He said the Government would report on a possible wage rise at a National Assembly meeting scheduled for May, 2013.

Meanwhile, speaking on the e-Government Portal on the sidelines of the meeting, Deputy Prime Minister Vu Van Ninh said the Government had reluctantly proposed a delay in the wage rise as it was important to follow the wage increase road map.

However, the delay would only affect people who are paid by the State, such as civil servants, as well as retired people, whose pension payments are calculated based partly on the minimum wage.

Wage increases in the private sector would be implemented as planned, he said.

Deputy Minister of Labour, Invalids and Social Affairs Pham Minh Huan confirmed that the ministry still proposed following the road map on wage rises in the private sector.

At present, domestic enterprises and foreign-invested enterprises are applying zone-based minimum wage levels based on the socio-economic development of each zone.

Zone 1 covers urban Ha Noi and HCM City. Zone 2 covers rural Ha Noi and HCM City plus urban Can Tho, Da Nang, and Hai Phong. Zone 3 covers provincial cities and the districts of Bac Ninh, Bac Giang, Hai Duong, and Vinh Phuc. Zone 4 covers the remaining localities.

The zone-based monthly minimum wage now ranges from VND2 million ($96) for Zone 1, VND1.78 million ($85) for Zone 2, VND1.55 million ($74.5) for Zone 3 and VND1.4 million ($67.3) for Zone 4.

The ministry proposed three options to raise minimum wage levels, with a 20 per-cent increase as the lowest rate. If approved, an increase in the zone-based minimum wage levels would be applied next year, Huan said.

Vice Chairman of the NA Committee for Social Affairs Bui Sy Loi said the economic slowdown, thousands of dissolved enterprises and a higher rate of unemployment had been factors in the Government proposing the delay.

However, Loi said, according to the conclusion of the Party Central Committee's meeting last May, the minimum wage for employees in the State sector should be increased to help them ensure basic living costs in 2015.

"In my opinion, the Government should seek measures to increase revenues and cut State spending, which would enable it to cover the wage rise," he said.

"Funding for wages is a kind of investment for development of human resources."

The committee's chairwoman, Truong Thi Mai, said that two kinds of minimum wage, one for the State sector and the other for the private sector, was one of the shortcomings of the country's salary policy.

"This is against the principle of a common minimum wage for the whole of society, which leads to the fact that salaries do not reflect work efficiency and productivity," she said. — VNS