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This year's pay rise in doubt

Update: May, 11/2013 - 09:42

The downturn may force the Government to delay an increase in the minimum wage. Economist Nguyen Minh Phong spoke with the newspaper Dat Viet about the plan.

In your opinion what are the pro and cons the ministry will face if it goes ahead with its plans?

In my opinion, before making a final decision, the ministry should analyse thoroughly two factors - the current living conditions of wage earners and the sources of State budget revenue.

From the State level, it is obvious that the budget is facing many difficulties in raising money to balance public expenses and to cover for the pay rise. Enterprises are in the same situation. If the road map for minimum wage increases adopted by the Government is implemented this year, it will stress enterprises.

And of course, workers will be the ones who bear the burden. That's why I support the option to delay increasing minimum wages this year.

However, if we analyse the other factor - people's living conditions, I can say the slowing of the inflation rate in recent months and the delay in adjusting the minimum wage will not affect people much.

The existing minimum wage can only address the minimum needs of working people. So the delay in raising wages will no doubt have negative impacts on workers. What do you think?

Yes, that's the reason why many people want the Government to stick to the road map. As I have mentioned, there are pro and con opinions about the delay in raising the minimum wage.

We all know that wages depend on a worker's performance and the state of the economy as well as State budget collections. We can't hide the fact that at present work performances are low and will continue to decline in the years to come. Compared with other countries in the region, the work performances of Vietnamese workers increase much more slowly.

The economic outlook may continue to be gloomy. If that is the case what will happen?

This is not an easy situation for Government, enterprises or other concerned bodies. As a civil servant myself, I definitely want to have a pay rise as soon as possible. But here we have to ask: "What are the minimum living conditions?"

Of course, everyone hopes the minimum wage will help them at least cover their bare daily needs. But for the Vietnamese people, I think the daily requirement is rather "modest".

How can a wage earner on the existing minimum wage of VND 1,050,000 ($50) live a decent life? For people living in cities, such a sum can meet only about a third of monthly minimum demands.

So the decision is now on the table of the decision makers. For enterprises, if the Government increases the minimum wage in 2013 and 2014, it will be a hard time for employers.

In return, they might react negatively by dismissing workers or forcing them to work more hours. These are the situations we have to take them into account.

In my opinion, in the future we should give up the idea of minimum wages and follow a calculation based on hours. In addition, pay rises should be based on enterprise profit earnings and the work performance of the workers. — VNS

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