Enterprises in Vietnam have asked that the government limit next year's increase in minimum salary to 10% to 12%.
This is the second year the National Salary Council has been in operation. As a result, employers, labourers and the government meet together to discuss the best level for salary increases.
Minimum salary hike proposed to be limited to 10% to 12%
At a recent seminar, held in Hanoi on June 5 by the Vietnam Chamber of Commerce and Industry (VCCI) and the International Labour Organisation (ILO), employers in Vietnam proposed increasing the minimum salary by a maximum of 12% next year.
VCCI statistics show that regional minimum salaries were increased by 9.9% in 2010, 30.1% in 2012 and 15.2% in 2014. The increases in the regional minimum salaries are equivalent to the the country’s rise in the consumer price index (CPI) during the 2010-2011, period but triple the CPI estimated for 2015.
In 2014, the regional minimum salaries ranged from VND1.9 million (USD89.6) to VND2.7 million (USD127.3) per month depending on locales.
VCCI experts proposed that a careful plan for minimum salary increase for 2015 should be worked out in advance in order to avoid possible negative impacts.
Salaries that are too high would affect the garment and textile, footwear and seafood industries. If the minimum salary is increased by 10%, it would drive up actual labour costs by 17%, they claim.
Nguyen Huyen Le, from the Institute of Labour Science and Social Affairs, agreed, saying that the institute’s study showed that an increase in the minimum salary of between 10% and 17% would drive up apparel enterprises’ salary expenses by from 17% to 29% and their overhead by 7% to 8% . Currently, as many as 80% of apparel companies and 30% foreign-invested enterprises in Vietnam have failed to meet their productivity targets and have been compelled to decrease production.
Phillip Hazelton, an ILO expert, said that proposals to increase minimum salary should be made based on reliable data and solid analysis of the socioeconomic impacts.
