Vietnam labor unions, businesses remain locked in minimum wage dispute

By Doan Loan   July 26, 2018 | 05:42 pm PT
Vietnam labor unions, businesses remain locked in minimum wage dispute
A man works at a mechanical factory in Hanoi. Photo by Reuters/Kham
The second meeting on minimum wages for next year has failed to reconcile two organizations at loggerheads over the issue.

The National Salary Board met for the second time this month to discuss whether or not to raise the minimum wage of Vietnamese workers next year.

The previous meeting had failed to reach an agreement.

On Thursday, the Vietnam General Confederation of Labor (VGCL), which represents the laborers, repeat its demand for an eight percent increase in minimum wage, or by VND220,000-330,000 ($9.4-14.6) per month, depending on the area.

This increase will meet 95 percent of laborers’ living costs, it said.

However, the Vietnam Chamber of Commerce and Industry (VCCI), which represents businesses, disagreed, saying there should be no increase in minimum wage next year.

Most business associations in the country don’t agree with the proposal to increase minimum wages next year, said Hoang Quang Phong, vice chairman of the VCCI.

One of the reasons the two organizations have not been able to come up to an agreement is that they have different methods of determining minimum living costs, said Ngo Duy Hieu, head of the Department of Labor Relations under the VGCL.

In order that Vietnamese laborers get a minimum wage that completely covers their minimum living costs, there should be an increase in their remuneration over the next two years that is suitable for businesses but also matches the contribution of laborers, he said.

VGCL recently published a study on minimum wage and cost of living after surveying over 3,000 laborers in 150 different businesses in the country.

26.5 percent said they were “barely getting by,” while 12.5 percent said their incomes were not enough to support their families, and have to work overtime or extra jobs to make ends meet.

The study found that an average worker’s minimum spending is VND6.5 million ($290) each month, while the average base salary is just VND4.6 million.

Thus laborers need to work on average an extra 28 hours a month just to make ends meet, the study found.

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