Blow to workers' union as Vietnam set for 11-year-low minimum wage bump

By Hoang Phuong   August 7, 2017 | 12:08 am PT
Blow to workers' union as Vietnam set for 11-year-low minimum wage bump
Men unload rice bags from a ship at a rice processing factory in Vietnam's Mekong Delta. Photo by Reuters/Kham
The 6.5 percent increase is only half of what the Vietnam General Confederation of Labor was lobbying for.

Vietnam’s National Wage Council, which is made of representatives from local businesses, labor unions and government officials, decided on Monday that the minimum wage next year will be raised to VND2.76-3.98 million ($121-175) per month.

The 6.5 percent rise will be the lowest wage increase in 11 years.

Vietnam's consumer price index rose by 4.15 percent in the first half of this year from the same period last year. The country's average annual income was around $2,200 last year.

The minimum wage is used by businesses to calculate salaries for their workers by multiplying the base level by a coefficient assigned to each worker, based on their skills and experience.

Vietnam has been raising this yardstick every year, a policy that has pitted labor groups against employers.

The two parties came up with the figure following five weeks of discussions, which started with the Vietnam Chamber of Commerce and Industry proposing a low offer of 5 percent and the Vietnam General Confederation of Labor asking for 13.3 percent.

Not everyone was happy with the end result.

Mai Duc Chinh, vice chairman of the labor confederation which represents unions across the country, said he had wanted an increase of at least as much as this year, which at 7.3 percent was already the lowest in a decade.

Prime Minister Nguyen Xuan Phuc will need to sign off on the proposal, but that is merely a formality.

Chinh said that workers will not be able to sustain their basic needs with such a low pay rise.

In a survey conducted by Vietnam’s Institute of Workers and Trade Unions in March, a third of the 2,600 workers questioned said their incomes were barely sufficient to live on, while 12 percent said their wages simply did not cover living expenses, forcing them to work extra hours.

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