The National Wage Council on Thursday decided to increase the minimum wage for Vietnamese workers by 12.4 percent next year, ending months of dispute between labor and business associations.
Under the proposal, still pending government approval, the new minimum wage for 2016 will range between VND2.5-3.5 million (US$111-156) a month depending on regions.
The National Wage Council, which comprises 15 members representing the national labor force, employers and the labor ministry, made its decision after the Vietnam General Confederation of Labor and the Vietnam Chamber of Commerce and Industry (VCCI), which represents thousands of employers in the country, failed to reach an agreement.
At the two previous meetings in August, the labor unions demanded a 16.8 percent bump while VCCI insisted on only 10 percent.
During the meeting Thursday, the labor unions offered to lower its demand to 14.3 percent but VCCI refused to bulge.
The council of mediators had to step in and proposed a rate somewhat in the middle.
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 was increased 15 percent early this year. Even after that, the labor confederation said many workers were still unable to pay for basic demands.
A survey conducted by the labor confederation in April-May at 60 businesses in both rural and urban areas found 92 percent of workers struggling to cover all their necessities with their current wages.
VCCI has argued that most businesses are not making profits and a sharp wage increase will create even more difficulties for them.
More financial pressure might eventually lead to shutdowns and layoffs, which will be worse for workers, VCCI representatives said Thursday.
But Mai Duc Chinh, vice chairman of the General Confederation of Labor, said that statistics showed that the economy is now strong.
Chinh said that the increase should have been at least 15 percent, just like this year
Vu Quang Tho, also from the confederation, said that when the wage is too low, workers will not be able to increase their productivity.
Chinh said the wage increase is still not official yet and his team will continue to find ways to campaign for a bigger raise.