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Minimum wage increase enhances living standards for key workers

Update: August, 27/2013 - 10:54

The National Wage Council is likely to directly advise on next year's minimum wage adjustments, MOLISA Deputy Minister and Council Head Pham Minh Huan told Tin tuc (News) newspaper.

What is the mechanism for the adjustment of minimum wage in 2014?

The previous minimum wage mechanism was based on indirect consultation between relevant sides and the Government, in which the Ministry of Labour, Invalids and Social Affairs (MoLISA) proposed plans for the relevant sides' discussions and later submitted it for the Government's approval.

In direct mechanism, representatives for workers and employers, in response to the council's discussion, proposed a minimum salary plan in an effort to gain the highest support and agreeability from all sides.

It is obviously difficult to reach agreement for the benefit of all sides. The labourers always want to increase salary, while employers want to adjust minimum wage based on competitive and expense factors.

The Government would guide the organisations charged with helping the labourers and employers choose a proper plan.

Recently, minimum wage was increased from VND1,050,000 (US$50) to VND1,150,000 ($54) from the beginning of July. This basic salary increase has brought about a surge in the prices of electricity, gas and a number of others essential products.

The recent wage increase hasn't done much to support the lives of workers. As a result, the establishment of the National Wage Council would help protect them.

Wage and price matters always have a close relation. A price was formed based on the price of the labour force and component expenses. Thus, all of these expenses should be balanced for price adjustment following market trend. Wage increase and price adjustment would directly impact each other.

That's why minimum wage increases should ensure compensating escalation of price and later improve the workers' life in the country's economic condition.

What is the time schedule for the adjustment of minimum wage?

Adjusted minimum salary levels would be applied from January 1 to December 31 each year. In preparation for the coming years' adjustment, we plan to start activities from May, one month later compared to other countries.

The council's technical subcommittees would work together for proposing a proper plan to MoLISA on July or August yearly.

The ministry would collect opinions and suggestions from relevant ministries and sectors before submitting the plan for the Government's approval in September.

A new salary plan would be announced on October 1, giving the employers three months for preparation.

A recent survey showed that minimum wage was still low for company workers, just covering 60 per cent of the minimum living standards for them . Can you reveal how the minimum wage would be increased compared to the current level and how the increase would consider rural people?

The increase level would depend on each year, but it would be based on principles of people's life protection and improvement. After the council's officially operate, technical subcommittees would carry out studies and survey both urban and rural areas in order to propose a reasonable plan.

What are the expectations of those who work in industrial zones in regard to next year's minimum wage adjustment?

I think that both workers from industrial areas in general and enterprises expect an appropriate wage adjustment.

The council's duty is to balance the interests of all sides.

The Government always encourages both sides to negotiate and propose a proper level of minimum wage.

The labour union at the grassroots level would play an important role in wage calculation and certain wage levels for workers, who, for their part, should strengthen their awareness in negotiation with employers. —VNS

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