VietNamNet Bridge – The Viet Nam General Confederation of Labour (VGLC) has submitted plans to increase the minimum wage by 16-17 per cent in 2016 to the National Salary Council.

If the plan is approved, each minimum wage level for all four of the country's wage zones will increase from VND350,000 to VND550,000 (US$16-25).

"To put forth the increase proposal, VGLC performed studies and took into account economic forecasts, like a five per cent increase in the Consumer Price Index, 6.5 per cent economic growth and 3-3.5 per cent rise in social labour productivity," said VGLC Vice Chairman Mai Duc Chinh.

The proposed monthly minimum wages are VND3.65 million ($168) for Zone 1, a VND550,000 ($25) hike; VND3.2 million ($145) for Zone 2; VND2.8 million ($127) for Zone 3; and VND2.5 million ($113) for Zone 4.

Zone 1 covers urban Ha Noi and HCM City; Zone 2 covers rural Ha Noi and HCM City along with urban Can Tho, Da Nang and Hai Phong cities; Zone 3 applies to provincial cities and the districts of Bac Ninh Province, Bac Giang, Hai Duong, and Vinh Phuc provinces; and Zone 4 takes care of the remaining localities. The salary hike is expected to meet only 86 to 88 per cent of minimum acceptable living conditions.

The 2014 Law on Social Insurance stipulates that salaries be based on whether employees include social insurance premium in pay, give allowances or provide other supplements. Therefore, in deciding the new minimum wage, VGLC took into consideration these other factors that might have significant impacts on enterprises' expenditures.

Nevertheless, VGLC stated that the hike must be sufficient to both cover the slippage in product prices (about 5 per cent per year) and match the annual 3-3.5 per cent increase of labour productivity in order to improve labourers' livelihoods.

"Increased productivity is closely associated with enterprises' competitiveness, therefore, productivity elevation should go along with raised minimum wage," said the vice chairman of the National Assembly's Social Affairs Committee, Bui Si Loi.

"In other words, minimum wage increases must satisfy labourers' basic living standards whilst allowing enterprises to compete in a period of integration, and to expand production and create more jobs," Loi added.

Nguyen Thi Thanh, a worker at the Bac Thang Long Industrial Park in Dong Anh District, Ha Noi, however, felt the wage increases still fail to provide for her basic needs.

"Despite raises to the minimum wage over the past two years, my income still fails to cover my basic living needs. I even work overtime only to get an income of just under VND5 million ($250) a month," she said.

"My and my husband's incomes are just enough to pay for daily needs, rent, water and electricity bills. We have to ask our parents care for our child in the countryside," Thanh said.

A recent survey by VGLC showed that the pay labourers receive this year rose by 14.75 per cent due to a minimum wage hike. The minimum wage, however, does not meet minimum living standards.

In the first half of the year, 235 labour disputes occurred, 59 more than the same period last year, Tin Tuc (News) reported.

"Strikes mainly called for higher rates of pay and improved working conditions. It is necessary that the minimum wage be raised," said deputy head of the VGLC's Labour Policy Department, Le Dinh Quang.

VNS