Vietnam’s labor union and business associations on Monday failed to reach a consensus over a minimum wage increase for 2016, with many employers complaining that the proposed bump is too high.
Vietnam General Confederation of Labor proposed a 16-18 percent increase to the current minimum wages of between VND2.15 and 3.1 million a month, but businesses only wanted a 6-7 percent increase.
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.
Hoang Quoc Phong, vice chairman of Vietnam Chamber of Commerce and Industry, which earlier supported a 10 percent increase, now said a 6-7 percent raise is “acceptable.”
Phong said the chamber, which represents thousands of employers in the country, changed its mind after consulting with businesses.
“They are in big difficulties, and 70 percent of them are operating without profits. A big wage increase will be a big burden.”
Members of the Vietnam Textile and Apparel Association said the industry is using nearly three million workers and it cannot afford sharp wage increases, especially in the context of higher power, fuel and shipping costs.
But representatives of the national labor union say they will fight for their proposal, which was made public last month.
Mai Duc Chinh, vice chairman of the union, said its proposed wage level can help workers pay for 89 percent of their necessities, as the current amount only covers 75 percent of their basic demands.
Chinh dismissed the argument that companies are having a hard time.
“The economy is growing better than last year,” he said, suggesting that the wage increase for 2016 should be at least equal to that seen earlier this year, which was 15 percent.