VietNamNet Bridge – While the Ministry of Labor, War Invalids
and Social Affairs (MOLISA) believes that raising the minimum wage is a must,
businesses fear that the production costs would be higher, while laborers worry
that their actual income would go down.
94 percent of businesses pay higher than stipulated minimum wages
A survey conducted by MOLISA on
1700 businesses showed that 94 percent of businesses now pay workers higher
than the minimum wages stipulated by the laws.
However, the minimum wage
increase would still be a big threat to business owners, because they would
have to pay higher for workers’ social insurance premiums and other expenses.
The problem is that the social
and healthcare insurance premiums are now defined based on the minimum wages
set up by the State. Therefore, when the minimum wages increase, the costs
businesses have to bear would also increase.
Under the current laws, businesses
have to pay 20 percent of the social insurance premiums for workers, while
workers have to pay 8.5 percent.
The labor intensive industries
prove to be the biggest sufferers from the minimum wage adjustments. As for
garment, footwear and wooden furniture enterprises, for example, the pay for
social insurance premiums account for 3-4 percent of the total expenses.
An executive of Kungviet garment
company Nguyen Quoc Lap said the 500 workers in his company have the average
pay of 3.8-4 million dong a month, which is higher than the stipulated minimum
wage.
Therefore, if the minimum wage is
raised, the actual income of workers would be unchanged. Meanwhile, both
businesses and workers would have to pay higher for social insurance premiums,
which means their income would decrease.
Minimum wage up, income down
According to Pham Minh Huan,
Deputy Minister of MOLISA, the minimum wage levels need to be high enough to
ensure the minimum living standards for every worker and one child.
However, in fact, the current
minimum wage just satisfies 57-63 percent of the basic requirements of workers
and their families.
In the first six months of 2012,
GDP grew by 4.38 percent and it is expected to growth by 6-6.5 percent by the
end of the year, while the consumer price index (CPI) is expected to increase
by 7-8 percent. The average wage in the labor market is expected to increase by
8-10 percent this year (it was 19.8 percent in 2011). Therefore, it is really
necessary to adjust the minimum wages applied for businesses.
Pham Gia Tuc from the Vietnam
Chamber of Commerce and Industry (VCCI) has warned that unreasonable
adjustments, if they are made, would badly affect businesses’ health and weaken
the national economy.
Tuc said that businesses are
facing too many difficulties, including the high capital costs, decreasing
purchasing power and market narrowing. Therefore, the production cost increases
would make the businesses’ problems more serious, which may lead to the
bankruptcy of businesses in masses.
Nguyen Tung Van, Chair of the
Textile and Apparel Trade Union, said that since garment companies are now
mostly doing the outsourcing for others, the pay for workers always accounts
for a big proportion, up to 52 percent, of the production costs.
At present, the 120,000 workers
in the garment industry have the average monthly income of four million dong
per capita. The minimum wage increases would mean the higher duties for
healthcare, unemployment and social insurance premiums.
In related news, 27,000
businesses reportedly dissolved or stopped operation in the first six months of
2012, an increase of 5.4 percent over the same period of the last year, while
225,000 people applied for unemployment allowances.
Compiled by Thanh Mai
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