Debate about the time to increase the regional minimum wage

The National Wage Council ended its first meeting on regional minimum wage negotiations on March 28. The specific increase has not been announced, but the parties have calculated the adjustment time. As usual, the plan and time of salary increase is usually closed at the third meeting, fastest in the second session, when the parties find common ground.

Ms. Vi Thi Hong Minh, Deputy Director of the Office of Employers, Vietnam Confederation of Trade and Industry (VCCI), said that in the first meeting, VCCI stated that if it is adjusted, it should be at the beginning of the year. 2023 because of the appropriate fiscal year. For enterprises, at the beginning of the year there were some disturbances such as recruiting new workers to make up for the number of leavers. Adjusted wages at this time can help businesses attract and retain workers to stabilize production for the whole year. If the adjustment is too urgent (next July), it will push businesses into a difficult position.

VCCI also needs to discuss more with associations to survey specifically about the company’s ability to pay as well as production and business activities during the year. After the Lunar New Year, a series of F0 and F1 workers caused production interruptions. The negative effects of previous epidemics may last the whole year, so businesses need more time to recover. It’s not that businesses that have orders will have stable production, but in fact, they have spent a lot of money after two years of both production and anti-epidemic.

According to Ms. Minh, the adjustment of the regional minimum wage does not affect the entire workforce, mainly affecting small and medium-sized enterprises – the group most negatively affected by the pandemic and about 10 million people in the industrial relations sector. unsustainable. Many businesses are paying more than the general rate and do not have to adjust again according to state regulations. If the regional minimum wage is adjusted, it is unlikely that the total real income of workers will increase.

Meanwhile, the representative of Vietnam’s trade union was consistent with the proposal to increase the regional minimum wage from July 1, instead of the usual 1/1 as in previous years. Mr. Le Dinh Quang, Deputy Head of Policy and Law Department, Vietnam General Confederation of Labor, said that the minimum wage is the lowest floor level, meaning to protect vulnerable workers, and also a basis for salary negotiations. in fact.

GDP in the first quarter of this year increased by 5.03%. The indicators show that the resilience of businesses is increasing and this is the time to share with employees after two years of struggling in the epidemic. The salary is not enough to live, forcing them to accept overtime to have more money to cover. “The business is difficult, but the employees have also reached the threshold of tolerance. It is necessary to increase wages soon, to avoid the situation of accumulating for many years to create shocks for businesses,” he said.

The union emphasized that wages for nearly two years without adjustment create instability in labor relations. When it is not possible to negotiate, the last solution of the employees is to stop working collectively. Statistics before and after the Lunar New Year, the whole country occurs 28 collective work stoppageslabor disputes in 11 localities, the main causes are related to wages and welfare regimes for workers.

The above statistics are somewhat consistent with the study Wage reform in the ILO’s non-state sector 2018. The agency pointed out that since 2012 the number of spontaneous strikes has decreased significantly and remained stable until 2017. The stabilization of prices along with regular regional minimum wage adjustments since 2014 contributed to in maintaining stability in labor relations.

The ILO recommends that member countries adjust the minimum wage regularly and warns that if, after several years of unchanged, the minimum wage is suddenly adjusted by a large margin, it will shock businesses. Adjustment decisions will also be more difficult. “Minimum wage adjustments becoming infrequent and unpredictable could lead to an increased number of spontaneous strikes,” the ILO study warns.

Regarding the increase, the parties have not come up with a specific plan, but the Vietnam General Confederation of Labor calculated that the wage increase must compensate for the price slippage in the past two years, especially in the first quarter of this year when the consumer price index (CPI) CPI) has increased by 1.92% YoY and core inflation has increased by 0.81%.

In the period 2016 to 2021, the average adjusted minimum wage is about 7.4%. According to the union, it is difficult to propose an increase to compensate for the past two years by doubling 7.4%, because businesses can’t stand it, but it also needs to be balanced for both sides and the increase cannot be lower than the average of the period. paragraph above.

After many years as Chairman of the National Wage Council, Mr. Pham Minh Huan, former deputy minister of Labour, Invalids and Social Affairs, emphasized that negotiating a salary increase has never been easy because each side has its own interests, especially after the losses from the pandemic.

Regarding the timing, he thinks that July 1 is near, and the beginning of 2023 “definitely should be adjusted”. Two years of not increasing does not mean cumulative to increase, but need to look at the majority of small and medium enterprises, enterprises with large number of employees to see their ability to balance costs to calculate.

“An increase of 7-8% is appropriate, less than 10%”, he said, saying that it is important for the Government to control inflation so that the real wages of workers are less lost and life is less precarious. . If the price continues to fluctuate like now, it is necessary to consider an earlier adjustment time.

Mr. Huan also assessed that the bargaining power of grassroots trade unions in enterprises is not strong and is almost impossible to negotiate successfully with employers. In order to improve working life, grassroots trade unions need people who really understand business life, negotiate to improve income and welfare for workers, and cannot just rely on increasing the regional minimum wage.

Hong Chieu