Society

Minimum wage to go up 17 percent

The Vietnam General Confederation of Labour (VGLC) has submitted plans to increase the minimum wage by 16-17 percent in 2016 to the National Salary Council.
The Vietnam General Confederation of Labour (VGLC) has submitted plansto increase the minimum wage by 16-17 percent in 2016 to the NationalSalary Council.

If the plan is approved, each minimum wage levelfor all four of the country's wage zones will increase from 350,000 VNDto 550,000 VND (16-25 USD).

"To put forth the increase proposal,VGLC performed studies and took into account economic forecasts, like afive percent increase in the Consumer Price Index, 6.5 percent economicgrowth and 3-3.5 percent rise in social labour productivity," said VGLCVice Chairman Mai Duc Chinh.

The proposed monthly minimum wagesare 3.65 million VND (168 USD) for Zone 1, a 550,000 VND (25 USD) hike;3.2 million VND (145 USD) for Zone 2; 2.8 million VND (127 USD) for Zone3; and 2.5 million VND (113 USD) for Zone 4.

Zone 1 covers urbanHanoi and HCM City; Zone 2 covers rural Hanoi and HCM City along withurban Can Tho, Da Nang and Hai Phong cities; Zone 3 applies toprovincial cities and the districts of Bac Ninh province, Bac Giang, HaiDuong, and Vinh Phuc provinces; and Zone 4 takes care of the remaininglocalities. The salary hike is expected to meet only 86 to 88 percent ofminimum acceptable living conditions.

The 2014 Law on SocialInsurance stipulates that salaries be based on whether employees includesocial insurance premium in pay, give allowances or provide othersupplements. Therefore, in deciding the new minimum wage, VGLC took intoconsideration these other factors that might have significant impactson enterprises' expenditures.

Nevertheless, VGLC stated that thehike must be sufficient to both cover the slippage in product prices(about 5 percent per year) and match the annual 3-3.5 percent increaseof labour productivity in order to improve labourers' livelihoods.

"Increasedproductivity is closely associated with enterprises' competitiveness,therefore, productivity elevation should go along with raised minimumwage," said Vice Chairman of the National Assembly's Social AffairsCommittee Bui Si Loi.

"In other words, minimum wage increasesmust satisfy labourers' basic living standards whilst allowingenterprises to compete in a period of integration, and to expandproduction and create more jobs," Loi added.

Nguyen Thi Thanh, aworker at the Bac Thang Long Industrial Park in Dong Anh district,Hanoi, however, felt the wage increases still fail to provide for herbasic needs.

A recent survey by VGLC showed that the paylabourers receive this year rose by 14.75 percent due to a minimum wagehike. The minimum wage, however, does not meet minimum living standards.-VNA
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