Minimum Wage to Rise 7.3 Pct in 2017

Representing employers, Mr Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (Vitas), said that garment and textile companies are in difficulty and not hiking the minimum salary in 2017 is preferred.

 

Meanwhile, a representative from the Vietnam Leather, Footwear and Handbag Association (Lefaso) advocated the rise in the minimum wage but suggested only a 5 per cent hike to offset the inflationary growth in 2016 because companies are struggling with hardships.

 

Mr Mai Duc Chinh, Vice Chairman of the Vietnam General Confederation of Labour, pointed out that if the minimum wage is added 5 per cent in 2017, it is just enough to offset currency deflation (expected at 5 per cent). Therefore, it trails after GDP growth and, according to the roadmap, the minimum salary must ensure livelihoods of employees in 2018.

 

He frankly accepted the plan of 10 per cent hike (1 per cent lower than the rate proposed by the Vietnam General Confederation of Labour).

 

After various opinions and discussions from different stakeholders, the Vietnam Chamber of Commerce and Industry (VCCI) approved a 7.3 per cent increase.

This rate lay in the range of three increase plans put forth by the National Wage Council: From 7 per cent to 10 per cent.

 

Finally, the National Wage Council agreed on the hike of 7.3 per cent in 2017. This option was endorsed by 13 out of 14 members of the National Wage Council.

The minimum wage in Region I will be added VND250,000 (7.1 per cent), in Region II VND220,000 (7.1 per cent), in Region III VND200,000 (7.4 per cent), and in Region IV VND180,000 (7.9 per cent).

 

This choice will be reported to the Prime Minister for consideration and ratification. If it is passed, the new minimum wage will take effect from January 1, 2017.

 

Mr Hoang Quang Phong, Vice President of VCCI affirmed that the increase of 7.3 per cent to the minimum wage is a great effort of National Wage Council’s members. This is higher than the 4 - 5 per cent rate hike proposed by VCCI. Hence, the adopted rate reflects the consensus and higher labour productivity. “We also find that there is a sheer need for sharing with those living with minimum standard of living because the past minimum salary met only 90 per cent of a minimum standard of living,” he noted.

 

This rise will require businesses to add efforts to enhance their productivity and competitiveness. This is extremely hard for any business. But, against the backdrop of deeper integration into the regional and global economy, corporate competition is vital to enhance labour productivity and enhance national economic growth.

 

Therefore, VCCI and relevant authorities also need to take more aggressive support measures to enable them to raise their competitiveness and meet minimum wage requirements. They also need to improve their corporate governance, renovate science and technology, and grasp new opportunities to sharpen their competitiveness.

“As for the business, the increase of 7.3 per cent is mandatory because the National Wage Council has adopted it. We hope the business know that this is an effort-worthy rate. Companies must reduce costs if they can,” Phong explained.

 

“Businesses and employers have never had as deep affection for employees as now. They regard their employees as invaluable properties. Without the labour force, there will be no enterprises. Therefore, they care much about their employees and want them to sympathise, share and support enterprises to develop,” he concluded.