When will we have a 'livable' wage for workers?

By Quang Tan   March 13, 2023 | 05:00 pm PT
When will we have a 'livable' wage for workers?
A garment worker is instructed by her manager at a factory in HCMC. Photo by VnExpress/Le Tuyet
Many businesses often complain that if they increase wages for their workers, their goods will not be competitive due to high prices. However, this is just a poor excuse.

It is heartbreaking to see workers fall prey to loan sharks simply because they have exhausted their income within a month. Most workers have only one source of income, and their wages are often calculated based on the regional minimum wage table.

From a macro perspective, encouraging or even mandating businesses to pay their workers higher wages can be a driving force for sustainable economic development. The General Confederation of Labor reports that the country has around 14.7 million workers, generating over 65% of the total value of social products and more than 70% of state revenue.

Each worker spends an average of VND6 million (US$253) per month, resulting in substantial annual expenditure by the workforce. It is evident that worker spending supports industries such as consumer goods, the retail sector, agriculture, and services. As workers receive salary increases and spend more, these industries will grow. This will increase state budget revenue.

I believe that our country can significantly boost domestic consumption by $40 billion if worker salaries increase to an average of VND12 million a month. Other countries strive to sell to the United States because American workers earn high wages and spend a lot. In the early 20th century, the United States implemented higher wages and fewer working hours to stimulate consumption. Since then, the U.S. economy has grown rapidly while remaining competitive, and Americans' incomes have remained high. China is now also starting to adjust its economy to increase domestic consumption and reduce dependence on exports.

When workers have enough money to spend on personal expenses, support their families, accumulate savings, and access health services and private education, it reduces the burden on the government, decreases the crime rate that is a result of poverty. At the same time, workers who come from rural areas can use their accumulated assets to invest in their homeland.

Many businesses falsely claim that increasing wages will make their goods uncompetitive due to the higher prices. However, I know many business owners who spend extravagantly on hobbies and personal purchases while their workers struggle to make ends meet.

It is time to adopt the wage calculation methods used in developed countries to help Vietnamese workers increase their income and develop the economy. It is unacceptable to let workers remain disadvantaged and until their old age.

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