return icon Vietnamnet.vn

Workers in VN paid half of salaries in China at Japanese factories

VietNamNet Bridge - The salary Vietnamese receive at Japanese businesses is half of what workers in China can expect. The key lies in productivity and the shift of production to higher stages of the value chain.
VietNamNet Bridge - The salary Vietnamese receive at Japanese businesses is half of what workers in China can expect. The key lies in productivity and the shift of production to higher stages of the value chain.

{keywords}




A recent survey by JETRO (Japan External Trade Organization) showed Vietnamese workers received $4,025 on average per year in 2016, though they worked for leading Japanese companies. 

The amount of money was less than 50 percent of the salary that Japanese companies paid to Chinese workers who work for factories in China.

JETRO’s Chief Representative Atsusuke Kawada said the pay to Vietnamese shows that Vietnam remains a market with cheap labor costs in comparison with other countries. This is a great advantage for Vietnam to attract Japanese investors.

The salary Vietnamese receive at Japanese businesses is half of what workers in China can expect. The key lies in productivity and the shift of production to higher stages of the value chain.

However, Vietnamese experts don’t think low labor costs are a good competitive edge. 

Nguyen Dinh Cung, head of CIEM said that labor productivity is closely related to the average income of workers, because it is the surplus value they bring.

ILO assesses labor productivity based on the value created in certain units of real time, i.e. the value created during one hour, one day or one year. 

In ILO’s ranking, Vietnamese labor productivity is among the lowest in Asia Pacific, which is only higher than Laos and Cambodia.

Pham Chi Lan, a well-regarded economist, pointed out problems in vocational training, programming and forecasting.

“One must not shift the blame onto Vietnamese workers. Vietnamese are diligent and creative. They usually win first prizes at the regional workers’ skill competitions, while the Vietnamese IQ is high, just lower than Singaporeans. Why is Vietnamese productivity lower than others?” she said.

Many Japanese conglomerates have factories in Vietnam, but they mostly do assembling, work which creates the lowest added value in the value chain. 

This explains why the wages Vietnamese workers receive cannot be high.

Vu Thanh Tu Anh from Fulbright Economics Teaching Program (FETP) said that Vietnam is still at the bottom of the ‘smile curve’ despite the presence of the world’s leading corporations in Vietnam over many years. 

He said that Vietnamese workers cannot expect high salaries until foreign invested enterprises in Vietnam do the assembling and undertake simple jobs in value chains.

The report by JETRO, released on February 14, showed that Vietnamese managers in Japanese manufacturing enterprises earned an average of $14,629, or VND330 million in 2016.

related news

Chi Mai

MORE NEWS

Only in Vietnam: Shrimp-chip straws, dragon-fruit noodles

VietNamNet sums up the “odd news” in Vietnam last week.

Vietnam in need of more village-based midwives

Vietnam is in need of village-based midwives as the country has more than 7,000 remote and disadvantaged villages where women do not regularly get antenatal care at medical facilities.

Fuel supply estimated to surge 10-15% in 2023

The Ministry of Industry and Trade has drawn up two scenarios for the minimum fuel supply in 2023, requiring key fuel enterprises to increase the overall figure by 10-15% in 2023, according to the local media.

Da Nang to hire more IT staff to meet digital transformation goals

In the 2022-2025 period, Da Nang needs at least 7,500 more information technology (IT) workers a year and in the 2026-2030 period, the figure is 8,000.

Ho Chi Minh City looks to cash in on new travel trends

Ho Chi Minh City expects to fully exploit bleisure travel - a novel type of tourism combining business travel with leisure time.

A special English class in Hanoi for the older generation

For the past four years, a special English class has been held in Hai Ba Trung District in Hanoi for students 60 to 90 years old.

VIETNAM BUSINESS NEWS DECEMBER 3

Strong economic growth creates platform for M&A market

VIETNAM NEWS HEADLINES DECEMBER 3

Hanoi Tourism Ao Dai Festival 2022 opens

Use of e-cigarettes by youth rockets with easy availability at shops

Many students and young people have been hospitalized in a deep coma after using e-cigarettes, which are easy to buy.

How will telecom carriers fare in a highly competitive market?

The traditional telecom market is getting saturated and facing upheavals, including a drop in revenue from traditional calls and SMS, a tighter management policy and changes in technology.

Number of international visitors to Vietnam sets 'record' after pandemic

Vietnam welcomed 2.95 million foreign visitors in January-November 2022, 21.1 times up year on year, but still down 81.9% compared with pre-pandemic levels in 2019.

Su-30MK2, Mi helicopters rehearse in Hanoi

On December 2, Su-30MK2 fighters performed in a rehearsal to prepare for the upcoming Vietnam International Defense Exhibition 2022.

Vietnam sends condolences over passing of former Chinese leader Jiang Zemin

Vietnamese leaders on December 2 cabled messages of condolences to Chinese leaders over the death of former General Secretary of the Communist Party of China (CPC) Central Committee and former President of China Jiang Zemin.

Ministry proposes canceling funding plans over disbursement delays

Disbursements of public funds sourced from foreign loans in the year through November had moved at a snail’s pace, reaching only slightly more than 25% of the full-year plan.

Hanoi to pilot bike rental service in six urban districts

Hanoi has approved a year-long pilot bike rental service programme in Hoan Kiem, Tay Ho, Dong Da, Ba Dinh, Hai Ba Trung, and Thanh Xuan districts.
back_to_top