Increasing Vietnamese wages out of whack with weak productivity

TN News

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Vietnam needs to balance the relation between labor salaries and production, which has been sluggish compared to the increasing rate of wages, according to the International Labor Organization (ILO).

VnEconomy on December 10 cited Guy Ryder, general director of the ILO, as saying Vietnamese workers are currently increasing productivity at a rate three times lower than their average wage is growing.

According to a recent report released by the organization, the average wage in Vietnam increased 26.8 percent year-on-year between 2007 and 2010, compared to the global rate of less than five percent over the same period. Last year, amid a poor economy, the growth of Vietnamese wages was estimated at 12.6 percent.

Consumer prices have risen around 47 percent since 2009, General Statistics Office data showed.

Another report conducted by Vietnam's Institute of Labor Science and Social Affairs and Manpower in nine cities revealed that the quality of Vietnamese labor is among the lowest in the region.

One third of 6,000 companies surveyed could not find workers who satisfied their requirements while one fifth of them said their employees were deficient in terms of implementing new technology.

Salaries in Vietnam last year ranged from US$2,300-2,680 per month, The Voice of Vietnam reported early this year, citing statistics from the Department of Labor, War Invalids and Social Affairs.

Yoon Youngmo, an official of ILO Vietnam, said the country needs a more effective formula to determine salaries so that the average wage growth will be in line with the growth of productivity.

With the current speed salaries are increasing in Vietnam, the country's minimum wage becomes an obsolete basis by which to determine wages, he said.

The minimum monthly salary is set at $50 and is scheduled to increase by ten percent in July 2013.

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