Regional minimum wage increase remains undecided

A meeting of the National Salary Council in Hanoi on August 5 failed to reach agreement on increasing the regional minimum wage in 2016 and the council is scheduled to meet again in the next two weeks.

The function gathered representatives from the Ministry of Labour, Invalids and Social Affairs (MoLISA), the Vietnam General Confederation of Labour (VGCL) and the Vietnam Chamber of Commerce and Industry (VCCI). 

MoLISA Deputy Minister and Chairman of the council Pham Minh Huan said pending the next meeting, relevant sides need to re-analyse factors and bases of suggested wage increases and their possible impacts. 

Regionally-based monthly minimum wages vary in four different regions based on four separate benchmarks determined by living standards in each area. 

The VCCI, representing employers, proposed a 7.2 percent rise or US$11.5 while the representative of employees – the VGCL – asked for an augmentation of between US$16 – 25. 

Although the VCCI later suggested an increased range between 7.2 percent and 10 percent, the VGCL said such a hike was still too low and would not meet worker demand, Huan noted. 

He considered the VGCL’s proposals reasonable but also cited pressure on companies, including enforcing new social insurance policies from January 2016 which could increase business expenses. 

Huan expressed his hope that consensus would be reached in the next meeting, adding that should a final option could not be reached, he – as the Chairman of the National Salary Council – would make a decision. 

VCCI Vice President Hoang QuangPhong said their proposed increase is fair since about 70 percent of businesses are currently unable to generate profits and the wage rise is a burden. The minimum wage increase should ensure the development of enterprises. 

Meanwhile, VGCL Vice President Mai DucChinh argued that the current minimum monthly salary of US$115-142 only meets 75 percent of workers’ basic living needs. The VGCL’s suggested rise of between 16 percent and nearly 18 percent will satisfy 87 – 89 percent of their basic needs.
VNA