Laborers at a Viet Huy Garment Company factory in Hanoi’s Thuong Tin District. Photo credit: Reuters
The head of Vietnam's only labor union warned that a pledge to ensure an equitable minimum wage by 2017 will fail unless the authorities hike it by at least 23 percent next year.
“If we don’t increase the minimum wage to meet 80 percent of basic living costs in 2015, we will be unable to reach the target set for 2017,” Dang Ngoc Tung, chairman of Vietnam General Confederation of Labor was quoted by VnExpress as saying.
Starting early this year, the minimum wage reached between VND1.9-2.7 million (US$90-128) a month. The variance is determined by the location of the worker.
Vietnam's per capita GDP climbed to US$1,890 last year, up 8 percent from 2012.
At a recent meeting held by the National Wage Council, Tung proposed the minimum wage be increased to VND2.3-3.4 million a month.
“Wages remain low as living costs continue to rise. This means salaries are actually falling making life harder for everyone,” he said.
Many companies in Hanoi and Ho Chi Minh City already pay workers between VND2.9-3 million, apart from allowances and bonuses.
“This shows that the country's minimum wage by region doesn't match the current economic situation,” Tung said.
According to a recent survey by the Vietnam Worker and Trade Unions Institute, actual minimum wages range between VND2.5-VND4 million a month, depending on location.
However, even that salary only covers 69-77 percent of a Vietnamese person's basic living costs, according to the survey, which polled 1,500 workers in 12 cities and provinces during the first half of this year.
Up to 13 percent of workers said their salaries don't cover their basic living costs, 25 percent said they had to spend carefully and 50 percent said their salary only affords the most basic standard of living.
Tung said the government should take action to prevent inflation and control prices to ensure an equitable minimum wage and avoid further jumps in the cost of living.
“Normally, prices increase when salaries increase. For this reason, salary increases should coincide with effective inflation control,” he said.
Mai Duc Chinh, deputy chairman of the Vietnam General Confederation of Labor, also said the current minimum wage is too low.
“Even with the highest minimum salary, VND2.7 million, a single worker cannot afford the basic living costs. How can we expect them to rear their children?”
The National Wage Council will wrap up a plan on minimum salary increases for 2015 this month and submit it to the central government for approval in September.