Vietnam's minimum wage leaves its workers impoverished

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Workers from Long An Province wait to be taken to nearby Ho Chi Minh City. Factories are recruiting new workers as many employees are quitting due to the long hours and low pay. Photo courtesy of Tuoi Tre

For decades Vietnam has failed to set a minimum wage that provides enough for people to live on, officials said at a meeting Friday.

Vietnam's minimum wage only meets between 50 and 70 percent of the cost of people's basic needs, officials said at the conference held by the National Assembly's Social Issues Committee to discuss ways to calculate a livable minimum wage.

The figures came from a survey conducted by the Vietnam Labor Union last year, which estimated that people need between VND750,000 and VND900,000 (US$36-43) per month to ensure they can provide themselves sufficient nutrition about 2,300 calories a day.

Adding in other expenses including the raising of children, one needs around VND2.4-3.7 million a month just to survive.

"Our minimum wage and minimum living standards have never met. The wage might not be able to catch up for at least a couple years," said Labor Union representative Dang Quang Dieu.

"Why do workers at footwear, garment and construction companies become skinny after three or four years?

"Because they work too hard without being able to afford meals that provide a minimal amount of nutrition," Dieu was quoted as saying in a Tuoi Tre report.

Officials from the labor ministry said many businesses will go bankrupt if the minimum wage is raised according to the conclusions drawn by the survey, and that it will suggest a roadmap that aims for the goal of establishing a livable minimum wage to be realized by 2017.

Vietnam's minimum wage ranges between VD1.05 and 2.35 million ($50.23-112.85) per month. It tends to be higher in urban areas and within the business sector.

Van Thu Ha from the Vietnam office of the global charity Oxfam said at the meeting that the system of varying minimum wages fosters "unfairness," as the basic living standards sought by laborers are the same everywhere.

Ha said many countries in the world use set criteria to establish a uniform minimum wage one that enables employees to afford necessary food plus clothing, accommodation, healthcare, education and transportation, as well as allows them to support to aging parents, maintain normal social lives and some left over to contribute to modest savings.

"That wage is supposed to change depending on the employer's condition, and the overall changes within the economy including those caused by inflation," Ha said.

Ha said Vietnam's minimum wage has fallen behind its economic growth. She said it has been increased in recent years, but at a speed 38 to 41 percent of the GDP per capita growth, which means the government can afford further wage increase.

She said the current wage only allows workers and their families a livelihood that hovers right at, or below, the official poverty line, calculated by Oxfam to be VND400,000 ($19) per person each month.

"In order to survive, they must work extra jobs."

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