Vietnam's labor union proposes 17 percent wage increase for 2016

By Thu Hang, Thanh Nien News

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A man works at a factory which produces agro-machines, in Ha Dong, outside Hanoi, Vietnam July 13, 2015. Current wages have not meet the basic living standards in Vietnam. Photo: Reuters A man works at a factory which produces agro-machines, in Ha Dong, outside Hanoi, Vietnam July 13, 2015. Current wages have not meet the basic living standards in Vietnam. Photo: Reuters

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Vietnam’s labor union is proposing a 17 percent increase in the minimum wage for employees, much higher than the bump rate suggested by businesses earlier.
Vietnam General Confederation of Labor made the proposal to the National Wage Council, which comprises 15 members representing the national labor force, employers and the labor ministry.
It said that, based on inflation and economic growth rates, the minimum wage should be raised by 16.28-17.74 percent next year to VND2.5-3.65 million ($114.6-167) a month.
The wage spectrum is currently set between VND2.15 and 3.1 million a month, depending on regions.
It 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. 
Better pays
Mai Duc Chinh, vice chairman of the labor confederation, said it made the proposal after considering that the consumer price index is estimated to increase around 5 percent year on year, economy to grow 6.5 percent and labor productivity 3.5 percent.
Chinh said businesses have recovered from their difficult times, so workers should receive better payment to meet their basic life demands.
He said the proposed wage level can help workers cover 89 percent of their necessities. 
The confederation said it will campaign for further increases so that the minimum wages in 2017 can cover 100 percent of all basic demands. 
Vietnam Chamber of Commerce and Industry, which represents businesses in Vietnam, earlier proposed a wage increase of just more than 10 percent, which would be the lowest bump in three years.

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