Officials want minimum wages raised, firms balk

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Officials at a Wednesday meeting suggested raising the minimum wage to give factory workers basic living conditions, given rising inflation, but many businesses said they cannot afford that.

At the meeting organized by the Ministry of Labor, Invalids and Social Affairs, a plan to increase wages was presented but officials said they were not satisfied, the Tien Phong reported Thursday.

Ngo Chi Hung, deputy manager of Hanoi Industrial Parks and Export Processing Zones, said 34 wildcat strikes had taken place during the first half this year.

The workers were asking for a rise as their current salaries could not meet their basic needs, Hung said.

A recent government decision raised the minimum wage by 14 percent as of May 1, from VND730,000 (US$35) to VND830,000 ($40) a month. But this does not match recent price hikes and inflation looks set to accelerate further.

Nearly 260 foreign-invested businesses at Hanoi's IPs and EPZs only pay workers the minimum wage set by the government, the Tien Phong report said, citing Hung.

He said the businesses believed that they have followed the laws by paying the minimum wage, so they give workers no bonuses or allowances.

More than 4,000 workers at the Yamaha Noi Bai factory receive nothing except their small wages every month.


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A big strike can force the factories to raise their payment by several hundred thousand dong, but that means little, he added.

"Almost all workers at IPs work extra time, beyond the official eight hours a day," Hung said. "Otherwise, they'd have nothing to eat."

Bui Hong Mai, deputy manager of industrial parks in the nearby Bac Ninh Province, said that the demand for higher payment has driven factory workers in the province to 14 wildcat strikes in the past six months.

Mai said the current minimum wage should be changed quickly.

The ministry's proposal at the meeting would raises the wage further to VND1.4 to 1.9 million a month, depending on the region.

Mai and other officials said that this increase would still fall short of real needs.

Tran Van Tu, an official at Vietnam General Confederation of Labor, said that the current minimum wage was "out of date" and the workers "have not reached basic living conditions."

Tu cited a survey by the confederation, showing that the lowest income earned by employees at offices in Hanoi and Ho Chi Minh City was VND2.2 million and in other places VND1.8 million.

He suggested that the ministry sets the minimum wage at between VND1.6 and 2.2 million, depending on the region.

No can do

Businesses attending the meeting said that it would be very hard for them to increase their investment by a single dong, the report said.

Dang Phuong Dung, vice chairwoman of Vietnam Garment and Textile Association, which employs 60,000 workers, said that garment and textile firms were going through the most difficult times.

Dung said high prices and inflation have pushed up their expenditure while sales remained slow. In difficult times, clothing was not an essential part, she said.

Nguyen Van Tien, director of a food processing firm, said he knows that the current wage is not enough.

But the accelerating inflation has also raised the input costs for the business by 20 percent, not to mention an interest rate of 25 percent, Tien said.

He said his firm cannot afford a pay raise at this moment.

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