Minimum wage to increase 5.3%

  • August 14, 2018

An increase in the minimum wage moved a step closer yesterday after the National Wage Council agreed to increase basic salaries.

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An increase in the minimum wage moved a step closer yesterday after the National Wage Council agreed to increase basic salaries.

The committee confirmed they will look at a rise of more than 5 per cent compared to last year.

The raise is equal to an increase of VND160,000-200,000 (US$6.8-8.6) each month per labourer.

It is believed to be the lowest increase of the regional minimum wage so far.

The increase will be submitted to the Government for final approval. 

The increase of the regional minimum wage was 7.3 per cent in 2017, equal to an increase of VND180,000-250,000($7.7-10.7) and 6.5 per cent in 2018, equal to an increase of VND180,000-230,000 ($7.7-9.9).

The decision was made after the third meeting of the council held in northern Hai Phong City yesterday and chaired by Deputy Minister of Labour, Invalids and Social Affairs cum President of the National Wage Council Doan Mau Diep.

Representatives from the Viet Nam Chamber of Commerce and Industry (VCCI), on behalf of employers and the Viet Nam General Confederation of Labour (VGLC), on behalf of employees, were also at the meeting.

They decided the monthly minimum wage for four different regions in Vietnam to be Region I: VND4.18 million (US$180); Region II: VND3.71 million ($160); Region III: VND3.25 million ($140) and Region IV: VND2.92 million ($126).

Region I covers urban Hanoi and HCM City, II covers rural Hanoi and HCM City along with urban Can Tho, Da Nang and Hai Phong cities, III applies to provincial cities and the districts of Bac Ninh, Bac Giang, Hai Duong and Vinh Phuc provinces and Regional IV takes care of the remaining localities.

Diep said the increase was selected at 5.3 per cent after many discussions and was thought to be reasonable.

“It is the level that could cover a price slippage of 4 per cent each year and still ensure a small actual pay rise for labourers,” he said.

Additionally, the level was also affordable for employers to pay, he added.

Mai Duc Chinh, vice president of VGCL, also said the increase was acceptable.

Chinh said the 2018 regional minimum wage actually met about 92-94 per cent of the minimum living standards.

However, if fully calculated, it was necessary to increase the regional minimum wage by 7 per cent each year to both offset inflation and ensure a steady actual pay rise for the labourers, he said.

The increase for 2019 was only 5.3 per cent, it meant the pressure of adjusting the regional minimum wage for 2020 would not be small, he said.

Source: VNS

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