Current minimum wage falls short of workers' minimum needs

October 10, 2022 | 07:31 pm PT
Hoang Anh Huy Technician
Current minimum wage falls short of workers' minimum needs
Workers at a factory in the northern Bac Giang Province, May 2021. Photo by VnExpress/Nguyen Ngoc
That the cost of living rises every year is obvious. Do companies have to adjust workers' salaries for inflation every year? The answer is obvious, again.

Whether or not to increase salaries and allowances and when this can happen depends on the agreement between the parties mentioned in the contract or the collective labor agreement, or regulations drafted by the employer.

In addition to the regional minimum wage, most other allowances are not specified, which means they can added to the contract that the employees have signed; and the business will calculate these to extract maximum benefit for itself.

There are those who can argue that the current minimum wage is enough to serve the basic living needs of a worker. We won't argue this.

But what if the worker has children? The expenses for raising a child or children are not included in the calculation of the regional minimum wage. How do those children live? How much should parents earn to raise them?

The minimum wage of Vietnamese workers is very low now. The latest adjustment of wages and benefits has barely kept pace with economic development and rising cost of living.

The country's minimum wage went up 6% on July 1, two years after remaining unchanged, to range from VND3.25 million to VND4.68 million ($136-196) a month depending on different regions.

No wonder Vietnam is a "paradise" for foreign manufacturing companies. The country is politically stable, has fewer long holidays during the year compared to other Southeast Asian countries and provides cheap labor in plenty.

At current labor wages in Vietnam, any kind of production would be profitable for many years.

Given such advantages, most foreign firms are willing to shift their production chains to Vietnam even though international reports say that the labor productivity of Vietnamese people is lower than most countries in the region and only higher than Cambodia (by 1.6 times).

It is the low minimum wage in Vietnam that makes it attractive to foreign investors and to an extent, they have made it possible for local people to have stable jobs and lives. But this has not lasted and workers these days work hard for relatively low remuneration and struggle to meet their daily needs.

After providing so many labor advantages for so long, it is time for Vietnam to move towards further sustainable goals such as quality of life.

Many studies have shown that reduced working hours have always been accompanied by increased productivity. With at least two days off a week, the service sector will have the chance to develop more sustainably and diversify the country's economy in different service sectors, including dining, tourism and transportation.

Workers constantly hope and look forward to timely and effective changes in adjustments to labor policies issued by the Ministry of Labor, Invalids and Social Affairs and the General Confederation of Labor.

We all know that in important salary negotiations, employees always face resistance from representatives of foreign enterprises.

So we face the challenge of having all parties on the same page in achieving sustainable development, economic diversity and improvement of the quality of life of disadvantaged and unskilled workers. Only if this happens will our workers' lives get better.

*Hoang Anh Huy is a member of the labor union at a comany in Dong Nai Province, southern Vietnam.

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