Workers at an assembly line at the My Phong Shoes Joint Stock Company in Chau Thanh district in the southern province of Hau Giang (Photo: VNA) Hanoi (VNA) - Vietnam has posted thehighest regional increase in minimum wages over the last three years, more thanIndonesia and China, but workers still struggle to make ends meet.
Things are not likely to change with the latestincrease, set to take effect next month, local reports said.
From July 1, the basic salary for civil servantsand public employees will increase seven percent to 1.3 million VND (about 57.2USD) from the current 1.21 million VND.
The new basic salary, used for calculatingpayrolls and allowances, will apply for public officials, public employeesworking in State agencies and civil service providers of the Party or theGovernment, State-funded socio-political organisations and the armed forces.
Le Dinh Quang, deputy head of the LabourRelations Department of the Vietnam General Confederation of Labour, said thatthe government had plans to increase minimum wage for employees every year toimprove living standards.
However, the current minimum wage increase onlymet 90 percent of the minimum living standard needs of workers and theirfamilies.
Even workers of businesses that pay higher thanthe minimum wage, 4-5 million VND per month, face many difficulties in dailylives.
An overwhelming majority of workers, 97 percent,did not want to work overtime, but had no choice but to do so, just to makeends meet, Quang told the Hai Quan (Customs) newspaper.
The newspaper reports that from 2014 to 2016, Vietnamhad the highest regional minimum wage increase of nearly 14 per cent, againstseven percent in Indonesia and 10 percent in China.
Many people wonder why such an increase isunable to meet workers’ demands, the report says.
The reason is that Vietnam’s minimum wage isonly higher than Laos and Cambodia and lower than most countries in SoutheastAsia like Thailand, Malaysia or Singapore, it explains.
The real wage of workers is still very low, itis not high enough to cover workers’ basic needs because the costs of manyservices also increase along with the minimum wage.
In fact, in some enterprises, the real income ofworkers reduces when the minimum wage increases.
Some business owners also threaten to cut theirworkforce if production costs increase because of higher wages.
The results of study by the ISEAL Alliance – theglobal association for sustainability standards and social accountability –released at a seminar in Hanoi recently showed that an employee in HCM Citymust be paid more than 6.4 million VND a month to meet their daily expenses.
The salary was calculated by the research teamon the basis of what a household of two adults and two children spend a month.
Unfortunately, the average salary of a worker inthe garment sector, a major employer, is just over 4.8 million VND a month.
According to the study, at a monthly wage of 6.4million VND, an employee may save 488,000 VND per month, five percent of theincome after spending for food, housing fee, insurance and other needs.
The study estimates that for rural areas, in twosurveyed provinces of Soc Trang and Thai Binh, a worker needs at least 3.99million VND a month, but the current average salary in these localities is just3.2 million VND.
Most employers pay only minimum wage, which isnot enough to meet actual minimum living costs, forcing workers to workovertime to make ends meet, the study found.
Workers are, therefore, left wondering if andwhen they will be able to meet daily expenses and save some money for a rainyday.
Bui Sy Loi, Vice Chairman of the NationalAssembly’s Social Affairs Committee, said the minimum wage must be adjustedbased on socio-economic development and workers should be compensated inaccordance with market mechanisms.
Currently, the minimum wage is based on foodprices, which is inadequate. Therefore, authorised agencies must re-calculatethe minimum wage so as to ensure the benefits of employees, especially whenthey retire, while creating favourable conditions for business growth, hesaid.-VNA
Things are not likely to change with the latestincrease, set to take effect next month, local reports said.
From July 1, the basic salary for civil servantsand public employees will increase seven percent to 1.3 million VND (about 57.2USD) from the current 1.21 million VND.
The new basic salary, used for calculatingpayrolls and allowances, will apply for public officials, public employeesworking in State agencies and civil service providers of the Party or theGovernment, State-funded socio-political organisations and the armed forces.
Le Dinh Quang, deputy head of the LabourRelations Department of the Vietnam General Confederation of Labour, said thatthe government had plans to increase minimum wage for employees every year toimprove living standards.
However, the current minimum wage increase onlymet 90 percent of the minimum living standard needs of workers and theirfamilies.
Even workers of businesses that pay higher thanthe minimum wage, 4-5 million VND per month, face many difficulties in dailylives.
An overwhelming majority of workers, 97 percent,did not want to work overtime, but had no choice but to do so, just to makeends meet, Quang told the Hai Quan (Customs) newspaper.
The newspaper reports that from 2014 to 2016, Vietnamhad the highest regional minimum wage increase of nearly 14 per cent, againstseven percent in Indonesia and 10 percent in China.
Many people wonder why such an increase isunable to meet workers’ demands, the report says.
The reason is that Vietnam’s minimum wage isonly higher than Laos and Cambodia and lower than most countries in SoutheastAsia like Thailand, Malaysia or Singapore, it explains.
The real wage of workers is still very low, itis not high enough to cover workers’ basic needs because the costs of manyservices also increase along with the minimum wage.
In fact, in some enterprises, the real income ofworkers reduces when the minimum wage increases.
Some business owners also threaten to cut theirworkforce if production costs increase because of higher wages.
The results of study by the ISEAL Alliance – theglobal association for sustainability standards and social accountability –released at a seminar in Hanoi recently showed that an employee in HCM Citymust be paid more than 6.4 million VND a month to meet their daily expenses.
The salary was calculated by the research teamon the basis of what a household of two adults and two children spend a month.
Unfortunately, the average salary of a worker inthe garment sector, a major employer, is just over 4.8 million VND a month.
According to the study, at a monthly wage of 6.4million VND, an employee may save 488,000 VND per month, five percent of theincome after spending for food, housing fee, insurance and other needs.
The study estimates that for rural areas, in twosurveyed provinces of Soc Trang and Thai Binh, a worker needs at least 3.99million VND a month, but the current average salary in these localities is just3.2 million VND.
Most employers pay only minimum wage, which isnot enough to meet actual minimum living costs, forcing workers to workovertime to make ends meet, the study found.
Workers are, therefore, left wondering if andwhen they will be able to meet daily expenses and save some money for a rainyday.
Bui Sy Loi, Vice Chairman of the NationalAssembly’s Social Affairs Committee, said the minimum wage must be adjustedbased on socio-economic development and workers should be compensated inaccordance with market mechanisms.
Currently, the minimum wage is based on foodprices, which is inadequate. Therefore, authorised agencies must re-calculatethe minimum wage so as to ensure the benefits of employees, especially whenthey retire, while creating favourable conditions for business growth, hesaid.-VNA
VNA
