MINIMUM WAGE INCREASE PROPOSALS STILL MIXED

No consensus

To set the minimum wage increase of 12.4 percent in 2016, the National Wages Council had to call three meetings and recorded 90 percent of ayes. But, on October 5, the Vietnam General Confederation of Labour sent the Official Letter No. 1567/TLD to the Prime Minister, asking for the revision of the rate to at least 14.4 percent in 2016, the same amount as in 2015.
 
Earlier, business associations asked the Prime Minister to adjust the minimum wage rise in 2016 to 6-7 percent. The Vietnam Textile and Apparel Association (Vitas) disagreed with the 12.4 percent hike because they claimed such increase was too high and this would engender enormous challenges for garment and textile businesses, particularly when they have to pay for employee insurances (social insurance, unemployment insurance, union dues and other costs, etc.)

based on total incomes rather than the minimum wage as now. Vitas did not reveal its suggested hike.
 
Arguments by the Vietnam General Confederation of Labour are quite familiar. In its official letter submitted to the Prime Minister, it pointed out four reasons for the proposed 14.4 percent: Seriously implementing the Labour Code and the roadmap that the minimum wage is a living wage for workers in 2017 and preparing for the implementation of Article 89 of the Social Insurance Law in 2018; 19.9 percent of workers live in poverty with their wages; 72 percent of workers have to spend very frugally and thriftily to afford their life; and only 8 percent of workers have accumulative savings.
 
While some argued that the labour productivity was low and the hike should be made accordingly, the Vietnam General Confederation of Labour rejected it, explaining that labour productivity depended on a variety of factors, with the most important factors being technological level and business administration.
 
The Vietnam General Confederation of Labour said that wages should be increased at the right time. It suggested the salary hike announcement should be made when the 9th National Emulation Congress, just before the opening of the 12th Party Congress because this event honoured workers with outstanding productivity and working innovation.
 
The representative of the labour force also said that the economy prospered in the first nine months 2015, with GDP expanding 6.5 percent. In 2016, the economy is forecast to outperform that in 2015, with GDP climbing 6.8 percent.
 
Impartiality, transparency needed

After many votes for the proposed hike, the National Wages Council has failed to please all stakeholders. To avoid useless meetings, many specialists suggested the Vietnam General Confederation of Labour and the Vietnam Chamber of Commerce and Industry (VCCI) - the representative of employers - sit down to seek a consensus. If VCCI is an official representative of employers, business associations and businesses must share the viewpoint with VCCI.

Likewise, trade unions, professional unions and other stakeholders must agree with the Vietnam General Confederation of Labour on a common value. Once the National Wages Council has agreed, all must respect its result and deem it as final and unarguable.
 
For its part, the Government will check the results proposed by both sides by looking at minimum livelihood, living salary, labour productivity among other things.

Source: VCCI