Escalated prices reduce value of higher Tet bonuses

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Workers worry inflation will null the value of their extra holiday money.

Holding a package of vegetables, tofu and cooking oil she planned to cook dinner with, Le Thi Ha returned to her dilapidated room dead tired after working overtime.

She said her employer, a woodworking company at Quang Minh Industrial Park, had decided to raise her Tet bonus for the upcoming Lunar New Year holiday, which falls on February 14, but she was still concerned that the sum wouldn’t provide for a very jubilant Tet.

“I have to wait for the bonus before I do any of my Tet shopping... but everything is expensive nowadays,” she said, adding that her salary was low and she hadn’t been able to save.

This Tet, Ha is expected to receive nearly VND5 million (US$270.78), but the amount also includes her monthly salary of nearly VND1.8 million ($95), overtime pay and her Tet bonus.

Many employers have promised higher Tet bonuses than last year, but experts said the total value could actually be lower due to increased consumer prices.

Higher by numbers

Dang Quang Dieu, deputy head of the Socio-Economic Department at the Vietnam Labor Union, anticipated that bonuses at industrial and export processing zones would be up 15-20 percent from 2009, when they ranged between VND700,000-16.2 million ($38-877.33) at local firms and VND900,000-120 million ($48.74- 6,500) at foreign-invested ones.

Kieu Thong, general director of mechanical company Truong Kieu at Quang Minh Industrial Park in Hanoi, said: “We don’t calculate the exact bonus amount but it will surely be higher than last year, possibly by 10-15 percent. We want to encourage the working spirit of our employees.”

Thong said the company had seen an increase in orders of up to 50 percent over the last few months. His company spent over VND300 million ($16,247) on bonuses for over 100 workers last Tet.

Cao Binh Phuong, an engineer from the construction firm An Thinh at Vinh Phuc Industrial Park said: “Last year, my company was hit hard by the economic recession, so our bonuses were equal to only one-month’s salary. The situation is better this year, so we hope our bonuses are bigger.”

Lower in value

Dieu said the Tet bonus could actually be less valuable for many workers this year due to escalated prices.

“The economy is expected to regain its previous strength and enterprises should pay higher bonus to encourage employees,” he said.

Many experts predicted that the price of most commodities, especially foods, would increase this Tet due to bad weather patters last year that slowed production. The increased consumer price index is expected to hurt low-income workers the most.

According to the General Statistics Office, the consumer price index increased by 6.88 percent in 2009 over the previous year.

Nguyen Thi Hong, a worker at Ho Guom Garment Joint Stock Company, said she and other workers at the company were worrying about a difficult Tet even if their bonuses increased.

“Prices have been increasing recently,” she said. “Moreover, we often receive bonuses just before Tet when prices increase even more. This means our bonuses will actually decrease.”

HOLIDAY PLANS

The Hanoi Department of Labor, War Invalids and Social Affairs said it had received Tet bonus reports from more than 100 firms, with the biggest bonus being VND50 million and the smallest being VND100,000.

The average bonus at foreign invested firms reached VND3.36 million per worker, up 6 percent over last Tet. Meanwhile, the bonuses at state-owned enterprises and local private ones stood at VND1.86 million and VND2.2 million per person on average, respectively.

In Ho Chi Minh City, the municipal Labor Union said the highest bonus issued by state-firms in District 3 was VND12 million while the average was VND2.6 and between VND4.2 million and VND4.8 million at foreign-invested companies. It noted that the private sector bonus gap was large, ranging between VND1.9 million and VND60 million.

Da Nang City has also announced its Tet bonus plans for 126 firms in the city, with both the highest of VND148 million ($8,015) and the lowest of VND71,000 ($3.84) belonging to foreign-invested enterprises. Tet bonuses at state-owned enterprises ranged from VND1 million and VND10 million with an average of VND3.1 million. An average bonus of VND3.2 million was recorded in the private sector, where the range was from VND100,000 ($5.42) and VND37.3 million ($2,020).

Reported by Bao Van

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