Vietnam's garment workers get paid better than Asian peers, in a sense

By VnExpress   September 15, 2016 | 08:35 pm PT
The ILO says employers in the country's garment and footwear sectors are generally following the minimum wage rule, but wages remain low.

Vietnam’s non-compliance rate with the minimum wage in the garment, textile and footwear sectors is the lowest among seven countries in Asia, at 6.6 percent, the International Labor Organization (ILO) said in its latest report.

The figure means out of every 100 wage employees in this sector, only 6.6 earn less than the minimum wage, which is put in place to protect workers from exploitation.

Vietnam has performed far better than its neighbors. The non-compliance rate in Cambodia is 25.6 percent and it's a staggering 53.3 percent in the Philippines.

Women in the garment industry are more likely than men to get paid below the minimum wage. Vietnam is among the countries with smallest gaps, at 5.7 percentage points, behind Cambodia and Indonesia.

The report also pointed out that the less-educated in the industry is more likely to be paid below the minimum wage than the better-educated.

“Minimum wages play a vital role in the garment and footwear sector, in which collective bargaining over wages is relatively rare,” said Matthew Cowgill, ILO chief technical adviser on labor standards in the global supply chain.

Due to the low minimum wage, around half of employees in the garment industry have to work more than 48 hours per week to supplement their earnings with overtime payments.

“Although Vietnam stands out in comparison to its neighbors, any level of non-compliance with the minimum wage is a concern and this issue should continue to be closely monitored,” said Cowgill, who is the lead author of the report.

“Compliance with the minimum wage is not the only factor of interest. The level of minimum wages matters, too. Vietnam’s minimum wage is relatively low as a percentage of typical wages in the garment sector, when compared to other countries in the region,” he continued.

Vietnam has four regional minimum wage levels currently ranging from VND2.4 million to 3.5 million (from $108 to $157). The National Wage Council, which includes representatives the government, employers’ and workers’ organizations, puts the minimum wage increase on the negotiation table annually.

The regional minimum wages have increased by 12-15 percent on a yearly basis between 2014 and 2016 and will continue to go up by 7.3 percent next year.

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