Labor unions on Monday urged the government to raise the minimum wage for workers next year by 14.4 percent, saying the increase proposed by the National Wage Council is low.
A statement from the Vietnam General Confederation of Labor said the economy has improved with steady growth, so it’s “unreasonable” for the minimum wage increase to be smaller than the one seen earlier this year, which was 14.8 percent.
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.
The wage now ranges between VND2.15-3.1 million (US$96-138), which according to the labor unions only covers 75 percent of the workers’ basic demands.
The National Wage Council, which comprises 15 members representing the national labor force, employers and the labor ministry, decided to increase the wage by 12.4 percent next year after the labor unions and business associations failed to reach an agreement following months of negotiations.
The labor unions demanded a 16.8 percent bump to help workers meet 89 percent of their basic needs.
Vietnam Chamber of Commerce and Industry, which represents thousands of employers in the country, insisted on only 10 percent, the lowest level since 2013.
As the wage council’s rate is still pending for the central government’s approval, the labor confederation has decided to keep building its case.
It said that many workers are still struggling in their daily lives, while businesses can afford to pay more.
A proper wage increase will prevent the employer-employee relationship from getting complicated, it said.
Businesses have warned that a big wage bump will threaten profitability and eventually lead to job cuts.