Regional minimum wage 2019: How much can the increase be?

After two tense meetings, the National Wage Council has yet to finalize the regional minimum wage increase for 2019. The gap in wage increases between the parties is still quite large.

Accordingly, after two negotiation sessions, the representatives of employers including VCCI proposed a 2% increase; the Cooperative Alliance proposed a 4% increase, while representatives of the Association of Small and Medium Enterprises and the Leather, Footwear and Textile Association have not yet given a specific figure even though they have agreed to the increase.

Previously, in the first meeting, the business community proposed a 0% regional minimum wage increase to create momentum for business development next year.

Meanwhile, representing workers, the Vietnam General Confederation of Labor still maintains the proposed rate of 8%.

Mr. Ngo Duy Hieu, Head of the Labor Relations Department (VGCL), said that the economic situation in the first 6 months of the year was relatively positive, with GDP in 2017 being the highest in the past 7 years. The CPI index is striving to be kept at 4%. Assessments show that the business situation of enterprises is improving, reflected in the number of 64,000 newly established enterprises and many economic projects being implemented. Meanwhile, the lives of workers are still facing many difficulties, not ensuring a minimum standard of living.

"In the context of economic development, workers need to benefit," Mr. Ngo Duy Hieu emphasized.

Ms. Tong Thi Minh, Director of the Department of Labor Relations and Wages (Ministry of Labor, Invalids and Social Affairs), member of the National Wage Council, said that wage increases need to be implemented in accordance with Resolution 27, according to which the minimum wage must meet the minimum living standard by 2020.

According to Ms. Tong Thi Minh, tIn the second session, the National Wage Council only stopped at analyzing the economic situation and business production of enterprises, especially in the first 6 months of the year. The economic picture is relatively positive.However, the Council also recognized that the challenges facing the economy in the last 6 months of the year are enormous. The consumer price index (CPI) in the first 6 months of the year is close to 4%, close to the National Assembly's target.

Currently, the Government is "straining" to keep the CPI from increasing to ensure real wages for workers. If wages increase by a few dong, but the price of goods increases, the wage increase will no longer be meaningful to workers.

Sharing his views on the 2019 regional minimum wage, the Director of the Department of Labor Relations and Wages said that wage increases need to improve living standards and maintain jobs for workers. This also means that it needs to be in harmony with the ability of businesses to pay to create stable jobs.

“The Government’s view is to create opportunities for the parties to negotiate, thereby proposing closer increases. The increase level must not only ensure the interests of the parties, but also ensure national issues such as employment, order, and social security. To have a common voice, the parties need to continue negotiating,” Ms. Tong Thi Minh emphasized.

Following the roadmap for increasing the minimum wage over the years, Mr. Bui Sy Loi, Vice Chairman of the National Assembly's Committee on Social Affairs, said that since the beginning of 2018, economic growth has shown positive signs, with GDP reaching 7.38%. However, the conditions for adjusting the minimum wage must also be based on fluctuations in the cost of living index, socio-economic development conditions, and supply-demand relations in the market.

“According to the Vietnam General Confederation of Labor, the minimum living standard of the labor relations sector only meets 90-92%. Considering the current growth conditions and minimum living standards, I think it is necessary to continue adjusting the regional minimum wage in 2019 in an upward direction.

This is to ensure that the minimum wage criterion must ensure minimum living needs by 2020. That is the final limit according to the roadmap committed by the Government," Mr. Loi stated his opinion.

Based on the actual situation, Mr. Bui Sy Loi commented that the regional minimum wage in 2019 could increase by 6-7% compared to 2018, thus reducing the burden for next year when having to catch up with the set roadmap.

However, the specific salary increase for 2019 will only be given if the parties can reach an agreement in this third meeting./.