Vietnam - Workers are struggling to survive

By 2013, price is climbing, the minimum wage should be VND3.5 million ($168.3) to meet today’s workers’ livelihoods.” - Dang Quang Dieu Chief of  VGCL’s Institute of Labour Research

Blue-collar workers at many foreign-invested enterprises in Hanoi are struggling to manage their lives with meager wages failing to keep pace with the increasing cost of living, writes Phan Hien.

Tran Thanh Hai, from northern Vinh Phuc province, has been working for a Japanese-invested manufacturing plant in Hanoi’s Thang Long Industrial Park for four years. With a poor monthly salary of VND3.5 million ($168.3), the six-month pregnant woman is currently sojourning alone in an eight-square-metre-stuffy room that monthly costs her VND600,000 ($28.8).

“I have to walk to work to save money, though my living area is far from the factory,” Hai said.

Hai’s room is poorly equipped. She said her most valuable asset is a gas cooker. “It is a wedding gift from my parents.”

Hai is in her twenties, but looks much older. She has to share a toilet with other workers from other 10 rooms nearby. All the rooms would be flooded whenever rains come.

“It’s hard to live on such a meager salary. I don’t dare to rent a better room. I have to send VND500,000 ($24) to my family in my homeland. I almost cannot save any money. I don’t know how to manage when I have a delivery,” she sighed.

Her neighbour, Nguyen Thi Thanh Nga from northern Phu Tho province is working for Japanese automobile component maker Denso Corporation and is monthly paid VND2.45 million ($117.8). Nga is now staying with two other female Denso workers in a small room costing them VND700,000 ($33.7) per month.

The thin 18-year-olds are saving each single penny due to a small salary. “I often have to eat instant noodle, one of the cheapest food, during the remaining days of each month as during these days I am often broke,” Nga said.

“Prices in the market keep spiraling, while our salary remains unchanged. Our life has become more difficult than ever. Thousands of workers at the park are suffering like us,” she said.

Living on bread and cheese

Like Hai and Nga, low salary has forced Nguyen Thu Huong to work 12 hours a day to improve her income from the park’s Canon Vietnam. Huong has been working there for six months.

“I even work during my days off to earn more cash to send home,” said the 26-year-old single worker.

Most of the expenditures for her family in central Thanh Hoa province come from her narrow pocket, while her monthly income totals VND4 million ($192.3). “Half of my income is used for my livelihood here and the rest is sent to my poor family,” said Huong.

Huong’s meals often lack nutrition, with some rice, vegetables and tofu, which are Vietnam’s cheapest food. Also poor incomes confine her and other three female workers in a 12sqm scantily-equipped room monthly costing them VND700,000 ($33.7).

“Prices are climbing so fast. Whenever the Vietnamese government announces an increase in minimum wages or there are hikes in petrol, gas and electricity price, our room rental also goes up. The pay rise remains three times lower than the average rise in prices in the marketplace,” said Nguyen Thi Hoan, a worker from Japan’s Hoya Corporation in the park.

Hoan also works 12 hours daily for an income of VND5.2 million ($250) per month, the highest sum among companies’ workers at the park.

“I can save some cash to monthly send to my family in northern Ninh Binh province. But, I am not sure about whether my existing income will be reduced or not, because many other companies in the park already faced with fewer orders,” Hoan said.

The story of low minimum wages hitting workers’ lives is a touchy issue for policy makers at many National Assembly (NA) meetings.

Hung Yen province’s NA deputy Cu Thi Hau cited a Ho Chi Minh City Department of Labour, Invalids and Social Affairs recent survey as stating 30 per cent of the city’s industrial park workers suffered from malnutrition.

“The low salary has forced workers to work overtime to earn more cash, and then their health would be more and more affected. In the long term, this will burden the entire society,” said Ninh Binh province’s NA deputy Bui Van Phuong.

According to the deputies, despite an annual rise in minimum wages in Vietnam, the rise did not mean better livelihoods for workers, because most enterprises were already paying their employees a salary higher than the state-stipulated minimum salary. However, soaring inflation and housing rentals are shrinking workers’ pockets.

Never be enough

At present, under the governmental Decree 70/2011/ND-CP dated August 22, 2011 on regional minimum wages on all types of enterprises in Vietnam, factory workers’ minimum wages are applied to local and foreign firms based on four economic and geographical regions. The wage for region 1, including big cities like Hanoi and Ho Chi Minh City, is VND2 million ($96.1) a month.

The thresholds for region 2, 3 and 4 are VND1.78 million ($85.57), VND1.55 million ($74.5) and VND1.4 million ($67.3), respectively. The decree took effect on October 1, 2011.

However, the Vietnam General Confederation of Labour’s (VGCL) chairman Dang Ngoc Tung said such a wage regime was just sufficient for 60 per cent of workers’ minimum daily expenses.

The Ministry of Labour, Invalids and Social Affairs (MoLISA) in August announced a draft decree on increasing minimum wages, under which the monthly minimum wages would be increased by up to 35 per cent – the highest rise ever – in early next year to help workers tackle skyrocketing living costs.

In the draft decree, the MoLISA introduced two options with the first one ranging from VND1.9 million ($91.3) for region 4 and the level of VND2.7 million ($129.8) for region 1. The second option would be in the range of VND1.8-2.5 million ($86.5-$120.2). This decree is expected to take effect from January, 2013.

However, VGCL’s Institute of Labour Research chief Dang Quang Dieu said during the past 20 years, the minimum wage had never met the minimum living needs.

Dieu claimed that the highest minimum wage just proposed by the MoLISA “cannot meet workers’ living demands.”

According to a VGCL survey conducted in 2011, the workers’ minimum living standards within the four regions 1-4 were VND3.04 million ($145.9), VND2.86 million ($137.3), VND2.66 million ($127.7) and VND2.47 million ($118.5), respectively.

“By 2013, price is climbing, the minimum wage should be VND3.5 million ($168.3) to meet today’s workers’ livelihoods. In order to make ends meet, 94 per cent workers have been working overtime and this overtime payment counts for 15 to 20 per cent of their total incomes,” Dieu said.

The top law-making body recently adopted the amended Labour Code, which will take effect on May 1, 2013. Under the code’s Article 92, the minimum wage is detailed on hourly, daily, weekly and monthly bases, and on geographical areas in different periods of time.

The government will adjust the minimum wage based on the increase of the consumer price index. The adjustment will be determined by the national salary council to be established by the government.

However, workers like Hai, Nga and Hoan seem not to be optimistic about the new code and the MoLISA’s new minimum wage regime.

“I heard that it would be very difficult to apply a salary regime like in the code. Moreover, the salary we are currently paid is bigger than the minimum wages stipulated by the state. Thus, in case the code-based salary and the MoLISA’s new minimum wage regime are applied, it is unlikely that our salary will be increased,” Nga said.

Phan Hien | vir.com.vn

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