Labour confederation calls for higher wages hinh anh 1Labour confederation calls for higher wages. ​Illustrative image (Source: VNA)

The Vietnam General Confederation of Labour (VGCL) on October 6 proposed a new minimum wage increase of 14.4 percent for the 2016 year, higher than the 12.4 percent increase decided by the National Wage Council back in September.

The confederation stood firm by the argument that the country's workers were entitled to a minimum wage increase at least equal to the previous year, roughly 14 percent. They said that, especially with positive signs in the economy's first nine months of this year, wages should reflect next year's promising outlook.

The 14.4 percent increase was also justified by pointing to this year's 0.5 percent year-on-year increase in GDP growth, projected to be 6.5 percent. The VGCL argued that wages should increase along with the GDP. For comparison, in 2013, GDP grew only by 5.4 percent and yet wages increased by 17.3 percent.

In addition, 19.9 percent of the country's workers said they could not meet basic living standards with their current wages, 72 percent said they could barely make ends meet and 8.0 percent said they managed very little savings.

The survey also pointed out that 62 percent of workers had to work over-time shifts to afford basic living needs and that it prevented them from participating in cultural, relaxation and self-improvement activities.

Regarding employers' ability to pay, the VGCL said tax agency reports indicated that a majority of employers across the country were already paying wages at 20-40 percent higher than the minimum wage. Many, they argued, therefore wouldn't be affected by the increase.

"A large number of employers were already paying workers between 4.4 million VND to 4.9 million VND (195-220 USD) in monthly wages in big cities such as Hanoi and HCM City- that's higher than our proposed increase," said VGCL Vice President Mai Duc Chinh at a VGCL meeting in August.

The VGCL also urged businesses to invest in technology and improve management capacity to increase productivity, rather than using low-productivity as an excuse to delay minimum wage increases.

"While workers do play a key role in improving productivity, it's not reasonable to expect them to help if minimum wage does not allow them to meet minimum living standards," said the VGCL's proposal submitted to the Prime Minister.

The proposal also said that the 14.4 percent increase would help the VGCL and the Ministry of Labour, Invalids and Social Affairs honour agreements with the International Labour Organisation.

The National Wage Council must resettle the matter after the VGCL and the Vietnam Chamber of Commerce and Industry (VCCI), which represents the business sector's interests, failed to reach a consensus after multiple meetings.-VNA