National Assembly to postpone wage increase

The Government is likely to delay its increase of the minimum wage planned for May, 2013, due to shrinking State budget revenues.
The Government is likely to delay its increase of the minimum wage planned for May, 2013, due to shrinking State budget revenues.

Despite planning to increase the minimum wage from 1.05 million VND (50.5 USD) per month to 1.3 million VND (62.5 USD) in May next year, deputies at the on-going National Assembly meeting proposed delaying the rise.

The move will affect seven million people on the State payroll, as well as retired people.

Finance Minister Vuong Dinh Hue said that because of a decrease in State budget revenue, it was difficult to secure the funds needed to raise the minimum wage, a move which will cost the State 60 trillion VND (3.12 billion USD).

He said the Government will report on a possible wage rise at a National Assembly meeting scheduled for May, 2013.

Meanwhile, speaking on the e-Government Portal on the sidelines of the meeting, Deputy Prime Minister Vu Van Ninh said the delay will only affect people who are paid by the State, such as civil servants, as well as retired people, whose pension payments are calculated based partly on the minimum wage.

Wage increases in the private sector will be implemented as planned, he said.

Deputy Minister of Labour, Invalids and Social Affairs Pham Minh Huan confirmed that the ministry still proposed following the road map on wage rises in the private sector.

At present, domestic enterprises and foreign-invested enterprises are applying zone-based minimum wage levels based on the socio-economic development of each zone.

Zone 1 covers urban Hanoi and HCM City . Zone 2 covers rural Hanoi and HCM City plus urban Can Tho, Da Nang , and Hai Phong. Zone 3 covers provincial cities and the districts of Bac Ninh, Bac Giang, Hai Duong, and Vinh Phuc. Zone 4 covers the remaining localities.

The zone-based monthly minimum wage now ranges from 2 million VND (96 USD) for Zone 1, 1.78 million VND (85 USD) for Zone 2, 1.55 million VND (74.5 USD) for Zone 3 and 1.4 million VND (67.3 USD) for Zone 4.

The ministry proposed three options to raise minimum wage levels, with a 20 per-cent increase as the lowest rate. If approved, an increase in the zone-based minimum wage levels would be applied next year, Huan said.

According to Vice Chairman of the National Assembly Committee for Social Affairs Bui Sy Loi, the economic slowdown, thousands of dissolved enterprises and a higher rate of unemployment had been factors in the Government proposing the delay.

However, Loi said, according to the conclusion of the Party Central Committee's meeting last May, the minimum wage for employees in the State sector should be increased to help them ensure basic living costs in 2015.

"Funding for wages is a kind of investment for development of human resources,” Loi said.-VNA

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