Raising the minimum wage and the resulting issues - Lesson 1: Motivation from a New Salary
The increase in the basic salary is welcome news for every official, civil servant, and worker. However, various levels, sectors, and units, especially those operating under an autonomous mechanism, are struggling to address the difficulties arising from the funding required to pay salaries according to regulations.
From July 1st, 2024, the basic salary for civil servants and public employees will increase by 30%. This event is considered a driving force contributing to the peace of mind of civil servants, public employees, and workers, and improving labor productivity.
Waiting and expecting
Prior to July 1, 2024, information regarding the increase in the basic salary received much attention from all officials, civil servants, public employees, and salaried workers.
Ms. Nguyen Thi Hong Thuy, a teacher at Nghia Hoi Commune Kindergarten (Nghia Dan District), has nearly 20 years of experience and currently receives a salary of 3.99. Before the salary increase, that salary was nearly 7.2 million VND per month. From July 2024, with that salary, Ms. Nguyen Thi Hong Thuy will receive a salary of over 9.3 million VND per month.
"This salary increase is something my colleagues and I have been eagerly awaiting. The increase in salary and allowances will help improve our lives and motivate us to strive harder and dedicate ourselves more to our profession," shared teacher Nguyen Thi Hong Thuy.
Ms. Lo Thi Thuy, a civil servant in Culture and Information in Xieng My commune (Tuong Duong district), has 18 years of experience working in the locality. Including salary and allowances, her total monthly income before the salary increase was over 8 million VND. Now that the basic salary has increased by 30%, Ms. Lo Thi Thuy is overjoyed, but hearing the news that various allowances are expected to be abolished or reduced, she is worried.
"Working 70 km away from home, I have to rent accommodation, and the cost of travel and living expenses is high. With that salary, I have to be very frugal to cover living expenses and pay for my children's education. The government has a policy of increasing salaries, which I and other officials and civil servants are very happy about. But we are concerned if the salary increase also restricts allowances…," Ms. Lo Thi Thuy expressed.
For Ms. Phan Thi Tam, a nurse at a hospital in Vinh City, her current salary is 3.33 (equivalent to nearly 6 million VND/month). With that basic salary, plus additional income from the hospital, Ms. Tam's total monthly income is over 12 million VND. If the base salary is increased, based on that coefficient, her salary would be nearly 7.8 million VND/month. However, she has also heard that her total monthly income cannot increase compared to before because the unit is operating autonomously and must balance its revenue and expenses. Therefore, while her basic salary has increased, her total income has not.
From July 1, 2024, the basic salary for civil servants and public employees nationwide (excluding the armed forces) will be increased from 1.8 million VND to 2.34 million VND per month. In Nghe An province (as of December 31, 2023), the total number of civil servants and public employees receiving salaries from the state budget is 53,971, of which 10,293 are employed (including public employees and contract workers) in public service units that are self-financing for recurrent expenditures and public service units that are self-financing for both recurrent and investment expenditures.
There are 10 categories of people whose basic salaries are being increased this time: officials and civil servants from the central to district levels; officials and civil servants at the commune level; employees in public service units; contract employees with certain types of jobs in administrative agencies and public service units; and people working within the staffing quota at associations that receive funding from the State budget.
Other cases to which the new base salary applies include officers, professional soldiers, defense workers, and contract workers in the military; officers, non-commissioned officers receiving salaries, police workers, and contract workers in the police; people working in cryptographic organizations; non-commissioned officers and soldiers in the military and non-commissioned officers and soldiers in the police; and part-time workers at the commune, village, and neighborhood levels.
Any salary increase brings excitement to workers. In principle, an increase in the base salary will increase an individual's income. However, this is completely different from increasing an individual's ability to balance income and expenses or save money. Because before each "planned" salary increase, market prices, especially for consumer goods, have already started to rise. Many people have shared: "The price of vegetables increased today; meat and fish increased yesterday; gasoline increased the day before yesterday… and the salary will only increase the day after tomorrow."
A new cycle of balancing expenses begins when salaries increase: How to manage income and expenses? How to save?... Workers are waiting for their salaries. Therefore, we return to the age-old problem our ancestors have solved: "Clever eating leads to satiety, clever saving leads to warmth!"
The biggest salary increase ever.
The new base salary increase, effective from July 2024, is implemented according to Government Decree 73/2024/ND-CP dated June 30, 2024, on regulations regarding the base salary and bonus regime for officials, civil servants, public employees, and the armed forces (the base salary increased by 30% from VND 1.8 million/month to VND 2.34 million/month). This is the largest salary adjustment ever.
Analysis by ministries, agencies, and the National Assembly shows that the implementation of salary reform according to Resolution No. 27-NQ/TW (dated May 21, 2018) of the 7th Plenum of the 12th Central Committee has been postponed three times and has yet to complete the tasks set out in this Resolution. The Steering Committee for Salary Reform has held dozens of meetings to discuss solutions to implement the contents of the aforementioned Resolution.
Salary reform is a crucial issue, directly affecting the lives of tens of millions of officials, civil servants, public employees, members of the armed forces, and workers in the public sector, and impacting more than 50 million people who benefit from policies linked to the basic salary. While this increase in the basic salary is implemented in accordance with Conclusion 83-KL/TW dated June 21, 2024, of the Central Committee, it has not yet included salary reform based on job positions, as targeted in Resolution 27-NQ/TW (2018).
According to Minister of Home Affairs Pham Thi Thanh Tra, this salary increase is the highest ever, contributing to improving the lives of those receiving salaries and allowances, subsidies, and support policies linked to the basic salary. This also creates motivation to improve productivity and work efficiency, contributing to social stability and demonstrating the Party and State's concern for cadres, civil servants, public employees, armed forces personnel, and those receiving allowances and subsidies in the context of the country's many difficulties. By the end of 2023, the whole country had allocated 680,000 billion VND to implement the new salary policy.
In Nghe An province, according to a report from the Department of Finance, the projected budget for implementing the salary reform policy in 2024 is 2,300 billion VND; of which, 1,700 billion VND is for adjusting the basic salary level; 280 billion VND is for the bonus fund; and 320 billion VND is for other policies funded from the salary reform budget. The head of the Department of Finance stated that the projected accumulated budget for salary reform in Nghe An province in 2024 is 2,399 billion VND. This estimated figure is based on the 2024 budget allocated to Nghe An province by the Prime Minister, and is currently being submitted to the Ministry of Finance to determine the funds from the 2023 reform budget to be carried over to 2024 for implementation.
Thus, as of now, the budget for salary reform in Nghe An province in 2024 is expected to be sufficient to meet the needs for increasing the basic salary and bonus scheme for officials, civil servants, and public employees, effective from July 1, 2024. At the same time, public service units that are self-sufficient in recurrent expenditures, self-sufficient in investment expenditures, or have autonomy at the levels stipulated by regulations need to make efforts to find additional revenue sources to pay the new salaries to their employees.
(To be continued)
