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Enterprises back proposal to increase minimum wage

Update: August, 25/2012 - 09:36

HA NOI — The majority of local companies agree with a proposal to raise the monthly minimum wage for employees under a draft decree by the Ministry of Labour, Invalids and Social Affairs despite economic difficulties.

The result emerged following the collection of ideas on the proposal from local companies at a meeting held yesterday by the ministry in HCM City.

In a draft decree, the proposal suggests raising the minimum wage from the current VND1.4 – 2 million (US$67 – $96) to VND1.9 – 2.7 million ($91-$30) or to VND1.8 – 2.5 million ($86 – 120).

However, the businesses also suggested that the decree be applied in March 2013 instead of January as scheduled, due to many economic difficulties, said Nguyen Hong Ha, deputy director of the HCM City branch of Viet Nam's Chamber of Commerce and Industry.

According to Ha, many commodities are currently in stock, input expenses have increased by 13 per cent and buying power is low, while more than 30,000 companies nationwide have suspended their operations and declared bankruptcy so far this year.

Raising the minimum wage will not affect companies that hire white-collar workers, but strongly impact on those that hire manual workers, she said.

Under the ministry's assessment, the current minimum wage only meets about 57-63 per cent of employees' living costs.

Mai Duc Chinh, vice chairman of Viet Nam's General Confederation of Labour, said that, based on this statistic, the current minimum wage was inappropriate.

Chinh said the minimum wage needs to be calculated based on the Labour Code that was amended this year to ensure the basic cost of living for employees, before adding that the adjustment may place a finanical burden on businesses as they will also have to pay more to purchase social insurance for their employees.

Nguyen Thi Lan Huong, director of the Institute of Labour Science and Social Affairs said that it had so far failed to calculate the additional fee companies will have to pay when the minimum wage rises.

According to the ministry, unless companies overcome difficulties in doing business during the last six months of the year, the decree will take effect in March 2013. — VNS

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