Vietnam’s minimum wage non-coowest among Asian apparel exporting countries

The rate indicates that for every 100 wage employees in the sectors, 6.6% earn less than the minimum wage set to protect wage earners from unduly low pay, the report says. It is far better than 25.6% for Cambodia as the second lowest country in the list and almost nine times lower than the highest of 53.3% for the Philippines.

While minimum wage compliance is weak throughout Asia’s garment industries, the depth of non-compliance varies among countries. But Vietnam stands out in this dimension.

The rate of extreme non-compliance which means wage workers are paid less than four-fifths of the minimum wage in the country is 3.8% and moderate non-compliance (workers paid between 80% and less than 100% of the minimum wage) at 2.8%.

On the contrary, the Philippines, India, Thailand, Pakistan, and Indonesia each has a large proportion of garment sector workers who are paid far below the minimum wage. The extreme non-compliance rate in the Philippines and India is 38.8% and 34.9% respectively. About one-fourth of Indonesia’s garment workers earn far below the minimum wage.

In all the countries, women in the garment sector are more likely than men to get pay below the minimum wage. With 5.7 percentage points, Vietnam is among the nations with smallest gaps, while the largest male-female non-compliance gap is found in Pakistan, at 60.4%.

The report says garment workers with lower levels of education are more likely to earn less than the minimum level.

However, the report points out that Vietnam’s minimum wage is relatively low in the garment sector, when compared to other regional countries.

“While Vietnam’s data used for this research dated back to 2013, minimum wages have significantly increased for the last three years. So we need to wait for new data to see if the high compliance continues even with significantly increased minimum wages,” Lee said.

This indicates the importance for the tripartite partners to develop stronger capacity to make the minimum wage decisions based on evidence and analysis and monitor compliance and effects of minimum wages in the coming years to balance social and economic needs, he said.

Vietnam adopts four regional minimum wages ranging from VND2.4 million to VND3.5 million (US$157). These minimum wages are proposed every year by the National Wage Council, which includes representatives of the Government and organizations representing employers and employees.

The report says Vietnam’s region-based minimum wages were adjusted up by about 12-15% on a yearly basis between 2014 and 2016 and would continue to go up by 7.3% next year.