Increase in minimum wages can not keep pace with inflation?


The minimum wages for workers at private companies nationwide increase by VN$300,000-650,000 per month from today, Oct, 1st,  three months ahead of schedule, drawing level at domestic and foreign firms.


Following the hikes, the minimum wage will be VN$1.4 million in underdeveloped and remote areas and VN$2 million in urban areas.


At domestic firms it will increase by VN$500,000-650,000, and at foreign enterprises, by VN$300,000-450,000.


For fixing wages, the Government has divided the country into four different regions based on socio-economic development, cost of living, and labor needs.


Region 1 comprising most districts in Ha Noi, Hai Phong, HCM City, and Vung Tau and the provinces of Dong Nai and Binh Duong will have a minimum wage of VN$2 million per month.


It will be VN$1.78 million in Region 2, VN$1.55 million in Region 3, and VN$1.4 million in Region 4.


Workers buying vegetables at a street market in HCM city

Concerning the enterprises that have not yet made the salary payroll, the application of minimum wages for workers at private companies issued by the government is the basis for them to consult when make the payroll, in accordance with the principles of Labor Law, Head of Salary Section Tong Van Lai ( Department of Welfares, Salary of  the Ministry of Labor, Invalids and Social Affairs ) said.


Speaking at a conference held to implement the decree yesterday, Deputy Minister of Labor, Invalids and Social Affairs Pham Minh Huan said the minimum wage hike would partly help workers make ends meet amid the sky-rocketing prices.


Skilled workers have to be paid at least 7 per cent higher than the minimum wage.


The Government generally encourages firms to pay their workers higher than the minimum wage and provide them meals to ensure better nutrition and food safety and hygiene.


The new wages will be effective until the end of next year.


However,  for the time being, all the districts in HCM city, except Can Gio are applying the standard of minimum wage of Region 1, ( VN$ 1 million per month )  and all private businesses are paying employees  higher then the government’s minimum wages.


Therefore the increase in minimum wages will not have and considerable impact on laborers and their income will not be raised in reality. Most of the workers when interviewed by Saigon Giaiphong reporters said that they fear the increase in minimum wages for workers can not keep pace with the inflation.



Source SGGP - Translated by Tri Dan

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