Wages in finance, banking sectors highest in Vietnam: ILO

By Thanh Nien News, TN News

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Bank employees delivering currency in Hanoi. Photo: AFP Bank employees delivering currency in Hanoi. Photo: AFP
Workers in financial services, banking and insurance are the highest wage earners in Vietnam, according to a report issued Friday by the International Labor Organization (ILO).
The workers earn an average of VND7.23 million ($344) a month.
Other top earners included scientists and technicians who earn an average of VND6.53 million ($311) and realtors who earn VND6.4 million ($305).
Meanwhile, people employed in household factories earned the smallest monthly wage of VND2.35 million ($112) followed by those in the agriculture, forestry and fishery sector where the monthly wage averaged out to VND2.63 million ($125).
Vietnam's overall gender pay gap weighed in at a little under 10 percent, which is quite small compared to the global average. However, that gap widened in the low-wage sector of agriculture, forestry and fisheries where women earn 32 percent less than men.
In the booming manufacturing sector, which is dominated by women, female workers earn 17 percent less than their male counterparts.
Long road to hoe
Wages grew significantly during the past two years, but Vietnam has a long way to go before it catches up to the rest of the world, the ILO said.
The country recorded an overall increase of 13.67 percent in average real wages between 2011 and 2013, partly due to a substantial increase in minimum wages.
Despite the overall positive developments, wages in Vietnam remain much lower than in developed economies and even lag behind many neighbouring countries.
Within the Association of Southeast Asian Nations (ASEAN) bloc, Vietnam's average monthly wage in 2012 stood at VND3.8 million ($181)--ahead of Laos ($119), Cambodia ($121) and Indonesia ($174). Vietnam's wage was equivalent to about half of Thailand’s $357, less than one third of Malaysia’s $609 and one twentieth of Singapore’s $3,547.
“These large wage differences between ASEAN countries reflect substantial differences in a number of factors including labor productivity,” said Gyorgy Sziraczki, ILO director in Vietnam.
Last year, global wage growth slowed to 2 percent, compared to 2.2 per cent in 2012, and has yet to catch up to the pre-crisis rates of about 3 percent, according to the ILO’s Global Wage Report 2014-2015.
Even this modest growth in global wages was driven almost entirely by emerging G20 economies, where wages increased by 6.7 percent in 2012 and 5.9 percent in 2013.
By contrast, average wage growth in developed economies had hovered around 1 percent per year since 2006 and before slowing significantly in 2012 and 2013 to only 0.1 per cent and 0.2 per cent respectively.
“Wage growth has slowed to almost zero for developed economies as a group in the last two years, with actual declines in wages in some,” said Sandra Polaski, the ILO’s deputy director-general for policy. “This has weighed on overall economic performance, leading to sluggish household demand in most of these economies and the increasing risk of deflation in the Eurozone,” she added.
In developed economies, wages frequently represent 70-80 percent of total income in households with at least one member of working age.
In emerging and developing economies, where self-employment is more frequent, the contribution of wages to household income is usually smaller, ranging from about 50-60 percent in Mexico, Russia, Argentina, Brazil and Chile to about 40 percent in Peru, or 30 percent in Vietnam.

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