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No consensus on wage increase in the region

Update: July, 22/2016 - 11:03
An increase in the regional minimum wage in 2017 has not yet been finalised because of differing opinions on how much wages should be raised. — Photo

HÀ NỘI — An increase in the regional minimum wage in 2017 has not yet been finalised because of differing opinions on how much wages should be raised.

At a meeting of the National Salary Council, held in Hà Nội on Wednesday, members of the council discussed issues relating to workers’ living standards and forecast the basic needs of workers and their families.

Lê Đình Quảng, deputy head of the Labour Policy Department under the Việt Nam General Confederation of Labour (VGCL), said the technical body proposed three options for a regional minimum wage hike at the meeting.

The first option is for the regional minimum wage to increase by VNĐ250,000-350,000 (US$11-15.7), or about 10 per cent. Another proposal suggested an increase of VNĐ230,000-300,000 ($10.3-13.4), while a third proposed an increase of VNĐ100,000-200,000 ($4.5-8.9).

The VGCL, which represents employees, recommended that the Labour Ministry increase the regional minimum wage by VNĐ250,000-400,000 ($11-17.9) per month, or an 11.11 per cent rise.

The salary hike was expected to meet 88.5 to 92.85 per cent of minimum acceptable living conditions, said Mai Đức Chính, vice chairman of VGCL.

The VGCL put forth the proposal after surveys conducted by VGCL showed that only 8 per cent of workers earned incomes that could cover their demands while also allowing them to save some money; about 20 per cent of the workers had incomes that did not meet their living standards, and the rest were struggling to make ends meet, he said.

At the meeting, the Việt Nam Chamber of Commerce and Industry (VCCI), which represents employers, proposed an increase of VNĐ100,000-180,000 ($4.5-8), or a 4.62 per cent hike for each minimum wage level for all four of the country’s wage zones.

The adjusted rate was being made to offset currency depreciation, said a VCCI representative.

Surveys conducted by VCCI pointed out that despite 54,500 new enterprises being registered in the first six months of this year, they met a lot of difficulties in their operations. The number of enterprises that dissolved or temporarily halted their operations reached 36,626. These enterprises account for two-thirds of the total number of registered ones, marking an increase of 17 per cent compared with the same period last year.

A minimum wage increase would not only meet labourers’ basic living costs, but also ensure the development of enterprises, said the VCCI representative.

If the wage is raised too high, enterprises will have to face an increase in expenditure, particularly expenses for social insurance and labour costs, and be at risk of bankruptcy, he said, adding that it would also hurt their competitiveness in the region.

The National Salary Council is expected to meet again in early August so that concerned parties have time to consider the proposals and reach a consensus before submitting a final plan to the Government for approval.

Last year, the Government decided to raise the regional minimum wage in 2016 by 12.4 per cent.

Accordingly, from January 1, 2016, minimum wages range from VNĐ2.4 million to 3.5 million (US$108-157), depending on geographical zone.

The wage hike was agreed upon after several negotiations between VGVL, which requested a 16.8 per cent increase, and VCCI, which asked for a hike of no more than 10 per cent. — VNS

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