Wages struggle

Published: 09:50 Wednesday - October 24, 2012

Vietnamese legislators are split on a government plan not to raise minimum wages next year, with one side worrying about depleted state coffers and the other aiming to spur consumption.

Laborers work at a factory of Viet Huy Garment Company in Thuong Tin District, 20 km (12.5 miles) south of Hanoi. Lawmakers led by the National Assembly chairman have opposed a plan not to raise minimum wages next year.

A group of lawmakers led by the National Assembly chairman opposed the plan at a meeting Tuesday, arguing that raising the minimum wage would be necessary to boost the economy.

They argued that the minimum wage, currently at VND1.050 million (US$49) per month, should be increased to stimulate consumption and clear stockpiles.

Nguyen Sinh Hung, chairman of the assembly, said the government had drawn up plans to reactivate the economy and clear stockpiles, but the plan to keep wages low would work against economic rejuvenation strategies.

“Without money, how can people go to the market?” he said.

He said the government could use income from the gas and oil industry to raise the minimum wage by around 10 percent to VND1.15 million a month.

But Phung Quoc Hien, chairman of the Finance and Budget Committee at the National Assembly, voiced support for the plan after a review of budget spending this year at the meeting.

Several officials on his committee agreed.

They said the plan would be necessary given the barrage of budgetary problems expected in 2013, when inflows are projected to slow and less important expenditures will likely be cut.

The review of the use of state budget in 2012 found the government had failed to meet targets set by the legislators for GDP, poverty alleviation and unemployment reduction.

Supporters of the plan said the minimum wage had been raised eight times since 2003 and the increases had been very high in recent years, helping boost the living conditions of factory and office workers.

The labor ministry said the government will make a final decision on the matter this month.

In August, the ministry had said a plan to raise the minimum salary at companies by at least 25 percent from January 1 may be delayed until mid-2013 because many businesses were still struggling.