The planned increase of the minimum wage should be carried out on schedule, otherwise society will be negatively impacted, the leader of the Vietnam General Confederation of Labor (VGCL) has warned.
>> Min wage fails to cover min living cost in Vietnam: survey >> HCMC hopes to woo experts with $7,000 salary cap Dang Ngoc Tung, the VGCL president, made the statement in an interview with Tuoi Tre
about the fact that the Government, citing difficulties in balancing the budget, has proposed that the National Assembly (NA) not to increase the minimum wage early next year, as previously planned.
In September this year, the National Wage Council met and agreed that on January 1, 2015, the minimum wage will be increased by 14.5-15 percent from the current rates for all the four zones of the country, Tung said.
However, when submitting its plan on budget expenditure allocation for 2015 to the NA, the Government cited difficulties in balancing the budget and asked the NA to delay the wage increase, the official said.
The 2015 budget plan was thus considered by the NA, and many deputies have said the minimum wage should be hiked on time, Tung said.
A number of NA deputies also suggested that if the increase cannot be carried out as planned, the Government must consider raising salaries for low-income earners in the State sector and retirees as a temporary solution.
“It is not advisable to delay an increase to the minimum wage. The Government should cut down unnecessary expenses to have more money to increase the wage.”
If people cannot live on their minimum income, then this will trigger negative reactions, Tung warned.
For example, State officials may cause problems for businesses and force them to pay money under the table. In general, they may be ready to commit corrupt acts to improve their modest income, the official said.
Minimum wages don’t match living costs
Currently, the minimum wages for Zones 1, 2, 3 and 4 are VND2.7 million (US$126.9), VND2.4 million ($112.8), VND2.1 million ($98.7) and VND1.9 million ($89.3), respectively, according to Government Decree 182.
Zone 1 covers urban Hanoi and Ho Chi Minh City; Zone 2 is applicable to rural Hanoi and Ho Chi Minh City along with urban Can Tho City, Da Nang City and Hai Phong City; Zone 3 comprises provincial cities and the districts of Bac Ninh Province, Bac Giang Province, Hai Duong Province, and Vinh Phuc Province; and Zone 4 consists of the remaining localities.
Meanwhile, a survey conducted recently by the Institute for Workers and Trade Unions, under the VGCL, shows that the minimum monthly living costs in Zones 1, 2, 3 and 4 are VND3,996,000 ($188.3), VND3,423,000 ($161.3), VND3,050,000 ($143.7), and VND2,695,000 ($127.5).
That means the current minimum wages in all four zones only meet 67-70 percent of the respective minimum living costs, Tung said.
Cu Phat Nghiep, chairman of the Trade Union of Pou Yuen Company, in Binh Tan District, Ho Chi Minh City, earlier said that the current minimum wage of VND2.7 million for Zone 1 is too low compared to the real living cost.
Even if the wage is increased to VND3.4 million ($159.8), it is still far lower than the minimum income a worker needs to survive in the city, Nghiep said.
According to some statistics, an average resident of Ho Chi Minh City must have a minimum income of VND5 million ($235) to make ends meet there, he added.
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