Vietnam labor federation wants minimum wage raised 8 pct

By Doan Loan   June 15, 2019 | 01:35 am PT
Vietnam labor federation wants minimum wage raised 8 pct
Workers arrange steel structure in Hanoi, Vietnam. Photo by Reuters/Kham
Vietnam General Confederation of Labor proposed an 8.18 percent increase in minimum wages while VCCI, which represents employers, suggested 2 percent.

At a meeting held by the National Wage Council on Friday, the confederation (VGCL), a national union representing Vietnamese workers, proposed two options for 2020.

One was to increase minimum wages by an average of 8.18 percent, in the range of VND180,000-380,000 ($7.7 - 16.3) a month, varying by region. The second option would be an average increase of 7.06 percent, or between VND160,000-330,000 ($6.9- $14).

The option chosen would depend on actual socio-economic conditions. These proposals are based on forecasts that GDP will rise by 7 percent, consumer price index (CPI) by 4 percent, and labour productivity by 5 percent, according to the VGCL.

Le Dinh Quang, deputy head of the VGCL’s Labor Relations Department, said workers’ lives would be very difficult if the proposed increase was not made.

In stark contrast, the Vietnam Chamber of Commerce and Industry (VCCI), which represents employers in the country, suggested an increase of 2 percent.

It said that generally, businesses have paid above regional minimum wages in 2019, adding that 72 percent of businesses were paying at least 6 percent above the minimum wage.  

The National Wage Council will hold one or two more meetings to debate the issue and come up with a final proposal on adjustments for 2020. This proposal is expected to be finalized and submitted to the government by July. 

Currently, Vietnam’s minimum monthly wage is divided into four levels, depending on region - VND4.18 million ($179) for region 1, VND3.71 million ($159) for region 2, VND3.25 million ($139) for region 3, and VND2.92 million ($125) for region 4. 

The four different minimum wage regions reflect the cost of living in each area. Region 1, including Hanoi and Ho Chi Minh City, has the highest minimum wage, while region 4, rural areas, has the lowest.

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