A worker works under a drain in Ho Chi Minh City / PHOTO COURTESY OF TUOI TRE
The exposure of excessively high salaries paid to executives of four public service companies in Ho Chi Minh City has showed that wages in Vietnam’s public sector remain unfair, even though it is not a problem that is too difficult to solve.
Last week, HCMC authorities suspended eight executives of the HCMC Urban Drainage Company, the HCMC Public Lighting Company, the Saigon Traffic Works Company, and the HCMC Park and Green Trees Company.
Previously the city People’s Committee released a report saying that they had been receiving “unusually high” salaries, as much as VND2.6 billion (U$123,000) for 2012, or about $10,250 each month.
These salaries were up to 41 times the salary of an average worker at the same companies, and much higher than the country’s annual per capita income that was $1,555 in 2012.
It was not the first time in Vietnam that leaders at state-owned companies were reported to receive high salaries, especially businesses that almost monopolize their sectors.
The latest case, however, still caused a public outcry.
Many people said they were upset to see in newspapers photos of workers who work among mud and dirt under drains for some VND8 million ($378) a month, compared to the monthly salary of VND200 million ($9,500) that their director was receiving.
Laws require public companies to establish funds to pay salaries, and since these funds are shared among workers and executives, when one gets a big part, the other’s part will perforce have to decrease.
Of course, Vietnam has already passed the time when it was said that everything had to be shared equally among everybody. Now, people who have special skills and make more contributions to their companies are obviously eligible for higher salaries.
But, how can the public service companies’ leaders justify the huge income, given that HCMC still has many places that are easily inundated by just one heavy downpour, or the fact that street lights are turned on and off randomly and unreasonably?
It is totally understandable that upon reading the news about the ridiculously huge salaries, many people asked: “Do they [executives] have any self-respect?”
Since salaries paid by public companies come from the state budget, or taxes and fees that people pay, the latest case has once again highlighted the urgent need for transparency in the way these businesses function.
Public companies like those specialized in urban drainage management are now not under pressure from any competition, and not required to publish reports about their business and operations. They are always eligible to benefit from the state budget, and can always charge people for their services, even when they do a below-average job.
Therefore, when executives of such companies receive unusually high salaries, the questions arise. Are they making easy money out of fees paid by hard-working people? Are funds from the state budget being distributed in a fair and suitable way?
There is also a question about how wages and other benefits are being paid to laborers at these companies. Is the payment being made under true agreements with workers, or are the latter either unaware of unfair treatment or helpless against powerful executives.
The unfair payment of salaries has been a problem in Vietnam for many years, especially so in the public sector. Workers are paid wages that are too low, while people who are in certain positions receive salaries plus bonuses and allowances that are too high.
The problem is not too hard to solve, though.
International organizations have many times issued warnings, materials and organized training sessions advising Vietnamese authorities on changing their method of paying salaries and promoting workers to one that is based on performance and not the number of years worked.
However, without a political willingness to initiate such critical change, things will continue to remain unfair, especially for workers.
*Pham Chi Lan is an economist who once worked as an advisor to the Prime Minister and served the vice chairwoman of the Vietnam Chamber of Commerce and Industry
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Thanh Nien News. Original Vietnamese story by Pham Chi Lan, published in Tuoi Tre newspaper