Minimum wage up, income down

The decision by the government to raise the minimum wage from October 1, 2011, or three months earlier than previously planned, has brought more worries than joys to laborers. Meanwhile, this has also raised the worry about the new wave of strikes.

Businesses cut down allowances to raise salaries

Truong Thi My Duyen, a worker of Starelec Company in the Tan Thuan Export Processing Zone, said that the minimum salary at her company is now at 1.9 million dong. The company once raised the minimum waged once before, therefore, Duyen does not know if the company continues raising the minimum wage this time. If it does, the minimum wage would only increase by 100,000 dong to meet the required level.

The information about the minimum wage increase has made Duyen more worried than joyful. She fears that the company would raise the minimum wage, but would cut allowances.

MD, a worker of Tosok, said that her minimum salary is 1,743,000 dong. Besides, she can enjoy some types of allowances, totaling 2,483,000 dong. The company has informed that it will raise the minimum wage to 2 million dong as requested, but would cut 200,000 dong in allowances. If so, D would have the total income of 2,540,000 dong which include the basic wage and allowances, which means that her income would increase by 57,000 dong only, which is not big enough for her to cover her basic needs.

In principle, when the minimum wage increases, laborers would enjoy higher levels of social insurance and healthcare insurance. However, the benefits will only come later. Meanwhile, in the immediate time, the only thing laborers can see is that their income is decreasing.

Disagreements

Le Thanh Tam, Director of the HCM City Department for Labor, War Invalids and Social Affairs, said that the minimum wage adjustment does not have much significance, because the prices of goods and services have increased by 40-50 percent. He said that the most important thing that needs to be done now is to curb inflation, not to raise wages.

Tam has also expressed his worries that the minimum wage adjustment may lead to the increase of strikes.

Nguyen Tan Dinh, Deputy Head of the HCM City Management Board of Export Processing Zone and Industrial Zone, said that a lot of enterprises do not build up the salary scale, therefore, the gap between the old and the new salaries is too narrow, which has made workers angry. This is also the main reason behind the tens of strikes recently.

Dinh said that the management board had a working session with the enterprises in industrial zones and export processing zones, where he advised the enterprises, which now offer the minimum wages higher than the stipulated levels, to raise their minimum wages once again. If they do not, they should explain to workers, so that the workers understand and do not go on strikes.

The management board has also advised enterprises to both increase minimum wages and preserve allowances in order to satisfy workers.

The decision on minimum wage increase has not only worried officials, but businesses as well. Huynh Le Khanh, Personnel Director of Nissei, said that the company has been applying the minimum wage of 2.2 million dong per month already, which is higher than the required minimum wage. Therefore, the company is still considering if to raise the minimum wage further.

Khanh said that Nissei is still listening to the news, and that if other companies raise minimum wages, Nissei will follow them.

Cu Phat Nghiep, Chair of the Trade Union of Pouyuen Company, also said that the newly recruited workers’ minimum wage is now approximately 2 million dong, while experienced workers have the salaries much higher than the minimum wage levels. However, the company still plans to raise the wages further, because it fears that the workers would complain.

Source: SGTT

Tags: Vietnam minimum wage