WAGE RISE OF 17% PROPOSED

The confederation said in a report sent to the council on Wednesday that the wage increase proposal is based on the consumer price index (CPI) forecast of 5%, economic growth of 6.5% and labor productivity rise of 3-3.5% annually in the 2015-2017 period.

In addition, operations of production and trading enterprises and job generation are improving, backed by Vietnam’s increased international integration, especially the nation’s participation in the ASEAN Economic Community and the Trans-Pacific Partnership (TPP) trade accord. But laborers are still leading a difficult life.

Therefore, the confederation has proposed the minimum wage in region one be revised up from VND3.1 million to VND3.65 million. Meanwhile, that of regions two, three and four is proposed to rise from VND2.75 million to VND3.2 million, from VND2.4 million to VND2.8 million, and from VND2.15 million to VND2.5 million respectively.

Such increases, according to the confederation, are in accordance with Article 91 of the Labor Code which says the minimum wage by region is adjusted on the minimum living standards of workers and family, socio-economic conditions and wages on the labor market.

A reasonable raise ensures the minimum wage will meet the basic needs of workers and family in 2017, the confederation said.

The labor confederation is also seeking to increase the minimum wage of 2017 by VND500,000-650,000 against 2016 (or over 19%), depending on different regions. In particular, the expected minimum wage of regions one, two, three and four would be VND4.3 million, VND3.8 million, VND3.35 million and VND3 million respectively.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI), earlier predicted the 2016 minimum wage would edge up around 10% like this year as labor productivity has not increased and many enterprises have been struggling despite the economy improving.

Loc stressed that regional minimum wage adjustments should increase incomes and improve the lives of employees but maintain the competitiveness of enterprises and sustain economic growth.

In recent years, the minimum wages have been adjusted up two, three times higher than GDP and CPI growth rates, piling pressure on employers due to higher social, medical, unemployment insurance and labor union costs.  

The National Wage Council plans a meeting in the final week of this month to discuss the minimum wage rises for next year before submitting a proposal to the Government this October.

The council comprises the Ministry of Labor, Invalids and Social Affairs representing the Government, VCCI representing employers, and the labor confederation representing employees.

Source: The Saigon Times