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.

Speaking at a conference on a minimum wage rise on July6, Huan said the ministry had worked with relevant ministries and agencies to raise the salary on October 1 instead 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 based on four elements: the Consumer Price Index, Gross Domestic Product, the average salary and minimum living standards.

According to the draft decree, the minimum salary of local enterprises and foreign-invested enterprises will be applied at the same levels.

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

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

According to Ngo Chi Hung, deputy head of Hanoi Industrial and Export Processing Zone Management Board, the pay rise was essential to improve the relationship between employers and employees and to minimise strikes in industrial zones.

In the first six months of this year, 35 strikes occured in industrial and processing zones in Hanoi . All of the participants asked for a pay rise, Hung said.

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

However, Vietnam Textile and Apparel Association vice chair Dang Phuong Dung said, the wage rise would be a burden for enterprises.

Dung said the prices of input materials kept increasing remarkably, raising production costs for 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 gather opinions on the issue from enterprises and local authorities before July 21.

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