Regional minimum wage increase: Difficult to "finalize" the plan because the difference is still up to 6%

At the end of the second working session of the National Wage Council at the Ministry of Labor, War Invalids and Social Affairs on the morning of August 25, the plan to increase the regional minimum wage in 2016 has not yet been agreed upon because the difference between the proposed levels of representatives of employers and employees is still large, about 6%.

The plan to increase the regional minimum wage in 2016 has not yet been agreed upon. (Illustration photo: VNA)

The 2016 regional minimum wage increase plan submitted by the Vietnam General Confederation of Labor to the National Wage Council has an increase of 16-17% compared to 2015, an increase of 350,000 - 550,000 VND/level. Meanwhile, the VCCI proposed a wage increase of only about 6-7%. However, during negotiations with labor representatives this morning, the employer representative raised the rate to 10%.

Mr. Hoang Quang Phong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), said that it is impossible to increase above 16% because increasing at this level will increase business costs by 5%, affecting production, business and employment.

“We have analyzed thoroughly to reach a common point of view, but it is really difficult. Each side has its own scientific arguments. However, our point of view is to put the interests of workers and business owners below the national interest. The country must have a strong enough business team to ensure sustainable development and that is the only way to ensure an increase in the minimum wage. We defend our 10% point of view,” Mr. Hoang Quang Phong emphasized.

During the working session this morning, the labor representative firmly maintained the proposed increase of about 16% and requested the National Wage Council to stop the working session to continue studying and negotiating in the next meeting.

Mr. Mai Duc Chinh, Vice President of the Vietnam General Confederation of Labor, said: “According to a survey by the Vietnam General Confederation of Labor in 2015, the minimum wage is nearly 1 million VND lower than the minimum living standard and up to 62% of workers do not have savings, nearly 20% of workers said their income is not enough to live on, 31.3% have to spend frugally and very economically. The survey results show that the actual salary of workers is 10-14% higher than the salary stated in the contract. The survey results are the basis for us to propose a 16.7% increase without affecting businesses.”

Thus, although there was an additional three weeks to calculate and study the plan, at the second meeting, both the employer and employee representatives still could not find a solution to reconcile the views of both sides.

Deputy Minister of Labor, War Invalids and Social Affairs, Chairman of the National Wage Council Pham Minh Huan, said that the wage increase plan between the two sides remained unchanged, still differing by 6%, and the second meeting ended without bringing the desired results. Therefore, the council will meet again on September 3.

“According to the regulations, if the two sides still have differences in the third negotiation, the Council Chairman will choose an option with arguments and assessment of the actual situation and submit it to the Prime Minister for decision,” said Deputy Minister Pham Minh Huan.

According to Vietnam+