A heated debate about minimum wage increase is taking place between the government, the labor confederation representing employees, and the representatives of employers.
Viet Nam’s National Wage Council proposed to raise minimum wage by 5% at lowest. Photo: Internet
Viet Nam’s National Wage Council (NWC) has recently held the first session of negotiation on rises in minimum wage in 2018. Its technical division presented three plans: the first one to increase minimum wage by 5%, the second by 6% and the third by 6.8%.
The Vietnam Confederation of Labor proposed a much higher rise of 13.3%, defending that a lower one would not be adequate to guarantee a decent living for workers.
In contrast, the Vietnam Chamber of Commerce and Industry (VCCI), representing businesses, insisted on a low rise of less than 5% or, even better, no rise at all. According to VCCI, companies are still having difficult times, facing tough competition and are at risks of reduced scales of production.
Many enterprises present at the meeting also expressed their concerns. Than Duc Viet, Deputy Director of Garment Company No.10, said that in garment sector – a labor-intensive industry, wage funds account for almost 60% of total cost. He, therefore, worried about the company’s payment capacity if the minimum wage goes up.
Doan Mau Diep, Deputy Minister of Labor, Invalids and Social Affairs (MOLISA), NWC President, revealed that not only domestic companies but foreign investors and business associations also opposed to the plans to raise minimum wages.
According to Le Xuan Thanh, an official at MOLISA, a rise in minimum wages must meet three requirements: adequate jobs creation, reasonable production cost, and decent living for workers.
The minimum wage rose by 12.4% in 2016 and 7.3% in 2017. The current minimum wages in Viet Nam range from US$114 to US$165, based on regions.
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