Minimum Wage 2019: Proposal to extend adjustment schedule

At the same time, determining the minimum living standard is a goal to strive for, but should not and cannot take the year 2020 as a prerequisite to ensure the minimum living standard, regardless of the efficiency of the economy as well as the endurance of businesses.

According to the argument of the Vietnam Association of Small and Medium Enterprises, the minimum living standard is a dynamic index, changing over time, depending on the needs of each person and group of people according to economic development.

Non-economic wage growth rate

The Vietnam Association of Small and Medium Enterprises believes that when building the minimum wage for 2019, it is necessary to thoroughly grasp the guiding ideology and conclusions of the 12th Central Committee Conferences. In which, Resolution 5 of the Central Committee is "creating favorable conditions to promote the development of enterprises and the Vietnamese business community to truly become the core force leading the cause of industrialization and modernization".

The Vietnam Association of Small and Medium Enterprises also cited the 7th Central Resolution: "The regulation of a number of principles on the construction of salary scales and tables has interfered excessively with the autonomy of enterprises in terms of salary." Specifically, the lowest salary of workers in sector I is 3,980 million, higher than the salary of civil servants, for example, level 1 is 2,942 million VND. Since 2013, salaries in the business sector have been adjusted annually, while in the public sector, it has been adjusted for many years.

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Resolution 7 of the Central Committee also determined to "adjust the regional minimum wage in accordance with the socio-economic development situation and the payment capacity of enterprises so that by 2020, the minimum wage will ensure the minimum living standard of workers and their families".

Along with that, the Vietnam Association of Small and Medium Enterprises emphasized the Government's policy on enterprise development, especially SMEs in Resolution 35/NQ-CP in 2016, Resolution 19/NQ-CP with the main idea of ​​reducing costs for enterprises, taking enterprise efficiency as both the goal and the condition to improve the living conditions of workers in a sustainable way.

The 4.0 industrial revolution also requires businesses to prepare to respond, especially to accumulate capital for technology investment and human resource training. Therefore, the Vietnam Association of Small and Medium Enterprises affirms that it is necessary to focus on reducing costs for businesses so that they can stabilize, accumulate capital, and adapt to market impacts.

It is worth mentioning that in reality, in recent years, the rate of increase in regional minimum wages has far exceeded the rate of increase in labor productivity and GDP growth.

“That is uneconomical and against the law. Specifically, in the period 2011-2016, labor productivity increased by only 4.5% while the regional minimum wage in 2014-2016 increased by 13%, 3 times the productivity growth rate. In 2017, productivity increased by 5.9% while the minimum wage increased by 7.3%. If compared with the GDP growth rate, in the period 2013-2017, GDP increased by an average of 7% per year, while the regional minimum wage increased by 13%, 2 times higher,” emphasized a representative of the Vietnam Association of Small and Medium Enterprises.

Minimum standard of living is not a prerequisite

According to the Vietnam Association of Small and Medium Enterprises, the minimum wage adjustment policy should be understood in a dynamic sense, not just an increase without any decrease or remaining the same during the year, depending on the socio-economic development situation and the performance of enterprises.

In fact, from 2014 to 2017, the National Wage Council (NLWC) has adjusted the regional minimum wage 5 times with corresponding increases for each year of 15.2%; 14.2%; 12.4%; 7.3% and 6.5%. Thus, there has not been any year where the minimum wage has been kept the same or adjusted downward. Therefore, the Vietnam Association of Small and Medium Enterprises recommends: "Delay the adjustment of the regional minimum wage until after 2019".

At the same time, it is necessary to unify the determination of the minimum living standard as well as the roadmap to meet it, which is only relative and a goal to strive for, but should not and cannot take the 2020 milestone of ensuring the minimum living standard as a prerequisite, regardless of the efficiency of the economy as well as the endurance of enterprises.