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Min wage fails to cover min living cost in Vietnam: survey

A survey has shown that the current minimum wage in Vietnam can cover merely two-thirds of the minimal living cost, and this gap can only be filled when the minimum wage increases by as much as 33 percent next year, according to the chairman of the Vietnam General Confederation of Labor (VGCL).

A survey has shown that the current minimum wage in Vietnam can cover merely two-thirds of the minimal living cost, and this gap can only be filled when the minimum wage increases by as much as 33 percent next year, according to the chairman of the Vietnam General Confederation of Labor (VGCL).
A survey has shown that the current minimum wage in Vietnam can cover merely two-thirds of the minimal living cost, and this gap can only be filled when the minimum wage increases by as much as 33 percent next year, according to the chairman of the Vietnam General Confederation of Labor (VGCL).

The VGCL assigned the Institute for Workers and Trade Union to conduct an independent survey on wages and the lives of workers in 2014, chairman Dang Ngoc Tung told VnExpress newspaper in a recent interview.

The survey was meant to identify the actual gap between the wage workers receive and the money they use to pay for their cost of living every month in each of the four regions of the country, Tung said.

The results of the survey show that the minimum monthly living costs in Zones 1, 2, 3 and 4 are VND3,996,000 (US$188.3), VND3,423,000 ($161.3), VND3,050,000 ($143.7), and VND2,695,000 (127.5).

That means the current minimum wages in all four zones can only pay for 67-70 percent of the respective minimum living costs, Tung said.

Zone 1 covers urban Hanoi and Ho Chi Minh City; Zone 2 is applicable to rural Hanoi and Ho Chi Minh City along with urban Can Tho City, Da Nang City and Hai Phong City; Zone 3 comprises provincial cities and the districts of Bac Ninh Province, Bac Giang Province, Hai Duong Province, and Vinh Phuc Province; and Zone 4 consists of the remaining localities.

Currently, the minimum wage for Zones 1, 2, 3 and 4 are VND1.9 million ($89.5), VND2.1 million ($98.9), VND2.4 million ($113), and VND2.7 million ($127.2), respectively, according to Government Decree 182.

“Based on the survey’s results, if we want to bridge the gap between the wages and the costs, the minimal salary must be hiked by as much as 30-33 percent in 2015, which is impossible to do,” the chairman said.

When amending the Code of Labor in 2012, lawmakers and policymakers set a target that workers can incur their minimum living cost with the minimum wage next year, he said.

But the target cannot be achieved given the current situation, Tung added.

Minimum wages will match minimum living standards in 2017

The VGCL once proposed that the National Wage Council should lay out a feasible roadmap to lift the minimum wage up to the cost of living level, Tung said.

The year 2007 has been chosen by the council as the new deadline for increasing the minimum wage, the official said.

Specifically, the minimum wage for Zone 1 will be VND3.4 million ($160) per month (the highest) and that for Zone 4 will be VND2.3 million ($108.3) per month (the lowest).

Cu Phat Nghiep, chairman of the Trade Union of Pou Yuen Company, in Binh Tan District, Ho Chi Minh City, said that the current minimum wage of VND2.7 million for Zone 1 is too low compared to the real living cost.

Even when the wage is increased to VND3.4 million, it is still far lower than the minimum income a worker needs to survive in the city, Nghiep said.

According to some statistics, a normal person in Ho Chi Minh City must have a minimum income of VND5 million ($235.6) to make ends meet there, he added.