Minimum wage rise in pipeline for October 1

The Ministry of Labour, Invalids and Social Affairs is completing a draft decree to increase the minimum wage from October 1, says Deputy Minister Pham Minh Huan.
The Ministry of Labour, Invalids and Social Affairs is completing adraft decree to increase the minimum wage from October 1, says DeputyMinister Pham Minh Huan.

Speaking at a conference on aminimum wage rise on July6, Huan said the ministry had worked withrelevant ministries and agencies to raise the salary on October 1instead of January 1, three months ahead of the planned schedule.

The salary hike would be made earlier because public employee salaries had not risen along with inflation, Huan said.

The move would help consolidate salary levels in economic sectors,enhancing the competitiveness among enterprises while improving workers'living conditions, he said.

Huan said the rise was basedon four elements: the Consumer Price Index, Gross Domestic Product, theaverage salary and minimum living standards.

According tothe draft decree, the minimum salary of local enterprises andforeign-invested enterprises will be applied at the same levels.

There are different levels of minimum wages for four regions in thecountry, with the first at 1.9 million VND (93 USD), the second at 1.73million VND (84 USD), the third at 1.55 million VND (75 USD) and thefourth at 1.44 million VND (70 USD).

This means theminimum salary in domestic enterprises increases by 500,000-570,000 VND(25-28 USD) and that of foreign-invested enterprises by 300,000-380,000VND (15-19 USD).

According to Ngo Chi Hung, deputy head ofHanoi Industrial and Export Processing Zone Management Board, the payrise was essential to improve the relationship between employers andemployees and to minimise strikes in industrial zones.

Inthe first six months of this year, 35 strikes occured in industrial andprocessing zones in Hanoi . All of the participants asked for a payrise, Hung said.


Surveys from the VietnamGeneral Confederation of Labour showed that the income of workers inHanoi and HCM City was between 1.8 million VND (88 USD) and 2.5million VND (122 USD). This payment was said to be quite low in thecontext of soaring goods prices.

However, Vietnam Textileand Apparel Association vice chair Dang Phuong Dung said, the wage risewould be a burden for enterprises.

Dung said the prices ofinput materials kept increasing remarkably, raising production costsfor companies. Thus, enterprises were forced to reduce their workforces,which meant the rate of unemployment would increase.


The Ministry of Labour, Invalids and Social Affairs will gatheropinions on the issue from enterprises and local authorities before July21.

The draft decree will come into effect in October if it is approved by the Government. /.

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