Employers ask for sympathy as labor unions demand 16 percent wage increase

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The government will decide on a minimum wage increase for 2016 after another meeting between the labor confederation and business associations on September 3, 2015. Photo credit: Saigon Times Online The government will decide on a minimum wage increase for 2016 after another meeting between the labor confederation and business associations on September 3, 2015. Photo credit: Saigon Times Online

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The second meeting to discuss a minimum wage increase for next year failed to reach a consensus as business associations refused to back down, arguing that the bump demanded by labor unions is too high. 
The Vietnam General Confederation of Labor, which represents all labor unions across the country, said on Tuesday that their workers deserve a 16.8 percent wage increase. 
Meanwhile the Vietnam Chamber of Commerce and Industry (VCCI), which speaks for thousands of employers, only agreed to a 10 percent raise.
The Vietnam Textile and Apparel Association, which is employing nearly three million workers, lobbied for a mere 6.7 percent bump.
Both sides kept presenting the same arguments this time. 
Hoang Quoc Phong, vice chairman of VCCI, said businesses won’t survive a high raise, claiming that 70 percent of them are not making profits.
“They are trying very hard to maintain their production, also because they think of the workers.”
Phong said local businesses are going to deal with many new policies and a lot of challenges coming with new free trade deals. 
“We really need some sympathy from workers,” he said, as cited by news website Saigon Times Online.
Workers' hardships
But Mai Duc Chinh, vice chairman of the labor confederation, said that workers are too poor to show any sympathy.
“I have suggested officials visit workers’ homes at industrial zones to see the reality. We cannot make policies sitting in these air-conditioned rooms and never try to learn the hardships of the workers,” Chinh said.
Chinh said the confederation’s proposed wage level can help workers pay for 89 percent of their necessities, as the current amount only covers 75 percent of their basic demands.
A survey conducted by his agency in April-May at 60 businesses in both rural and urban areas found 92 percent of workers struggling to cover all their necessities with current wages.
Around 20 percent of them said the money was not enough for them to live on, 31.3 percent said they had to be very thrifty while 40.7 percent said they barely made ends meet. Only around 8 percent said they could save a little.
Minimum wage is used by businesses to calculate salaries for their workers, by multiplying the basic amount by a coefficient assigned to each worker based on their skills and experience. Beginners, for instance, are often given a multiplier of just above 2.3.
The wage is set to receive an annual increase. It currently ranges between VND2.15 and 3.1 million (US$95-137.5) a month, after a 15 percent increase earlier this year.
The National Wage Council, which comprises 15 members representing the national labor force, employers and the labor ministry, has been organizing meetings between the labor unions and business associations to discuss the increase for 2016.
If they still cannot reach an agreement at a final meeting on September 3, the council will make a decision and propose its own rate to the central government.

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