Ministry rejects proposal to hike minimum regional wage
Ministry rejects proposal to hike minimum regional wage
The Ministry of Labor, Invalids and Social Affairs has rejected the Vietnam General Federation of Labor’s proposals to increase the minimum monthly wage for employees in four regions of the country and adjust the minimum regional wages on July 1 instead of January 1.
Workers at a textile plant run by Viet Tien Garment SJC. The Ministry of Labor, Invalids and Social Affairs has rejected proposals to increase the minimum regional wages and change the time to adjust the minimum regional wages - PHOTO: THANH HOA
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According to the ministry, the minimum regional wages should not be hiked this year as Covid-19 has heavily hit the country’s socioeconomic situation. The wage hike will cause an impact on laborers’ jobs, while enterprises are still facing multiple difficulties, the local media reported.
The ministry cited the General Statistics Office’s data on laborers and jobs to say that production and business activities have yet to recover to the way they were in the pre-pandemic period. The country has seen more than 101,700 enterprises suspending their operations, up 14% over 2019. On average, nearly 8,500 firms withdrew from the market per month.
In addition, the unemployment rate has surged to 2.48%, the highest over the past decade. The average income of laborers also fell VND75,000 to VND6.62 million. Therefore, the minimum regional wage hike will not help raise the incomes of laborers.
If the minimum regional wages are kept unchanged this year, laborers' basic living needs will still be ensured.
Covid-19 will continue showing complicated developments in Vietnam and the world as a whole. When it will end remains unknown and its impacts on Vietnam’s socioeconomic development remain grave.
Therefore, the unchanged minimum regional wages will facilitate enterprises to recover and help laborers maintain their jobs.
Earlier, the National Wage Council had also suggested keeping the minimum regional wages unchanged in 2021 due to the impact of Covid-19. Specifically, the minimum wages in Region 1, 2, 3 and 4 were kept at VND4.42 million, VND3.92 million, VND3.42 million and VND3.07 million, respectively.
As for the proposal to adjust the minimum regional wages on July 1 annually instead of January 1, the ministry analyzed that the time to adjust the minimum regional wages is not fixed under the prevailing regulations.
A majority of countries worldwide adjust the minimum regional wages at the start of the new fiscal year to create favorable conditions for enterprises to draw up their production and business plans. Vietnam’s fiscal year starts on January 1 and ends on December 31, so adjusting the minimum regional wages on January 1 is reasonable.
If the adjustment is made on July 1, enterprises and laborers will have to negotiate several times to adjust policies, which could lead to disputes and negatively affect their relations.
