VGCL proposes 11% increase in minimum wage

The Vietnam General Confederation of Labour (VGCL) has asked the National Salary Council to increase regional minimum wages in 2017 by 10-11% from the current rates.

Le Dinh Quang, Deputy Head of the Labour Friendship Department under VGCL, said the proposal was carefully made with a view to harmonise businesses’ economic situation with workers’ daily needs.

Surveys conducted by VGCL showed that only eight% of workers had income that could help them meet their demands and also save some money; about 20% of the workers had income below their living standards; and the rest were struggling to make ends meet, Quảng said.

He said an annual wage increase might cause difficulties for businesses, while the current wage helped workers to cover 80% of their basic demands.

The VGCL wanted the regional minimum wage road map to ensure that the basic demands of labourers and their families were met, he said.

Pham Minh Huan, Deputy Minister of Labour, Invalids and Social Affairs, said the negotiation on wage hikes in 2017 would not be as difficult as it had been in previous years, as the gap between the wage proposals had been narrowed.

The Vietnam Garment and Textile Association has proposed there should not be a minimum wage hike, while the Vietnam Chamber of Commerce and Industry (VCCI) has suggested a low rate of increase and VGCL has revised its wage increase proposal.

The regional minimum wage increase in 2017 would not be as high as the 12.4% increase this year, Huan said.

The National Salary Council would decide on a wage hike at a meeting later this month, before submitting a final plan to the government for approval, he said.

Last year, the government decided to raise the minimum wage in 2016 by 12.4%.

Accordingly, from January 1, 2016, the minimum wages range between VND2.4-3.5 million (US$108-157), depending on geographical zone.

The wage hike was agreed upon after several negotiations between VGCL, which represents employees, and VCCI, which represent employers.

The two sides had failed to agree on how much the wages should be raised as VCCI had asked for a hike of no more than 10%, while the VGCL had requested a 16.8% increase.