HCMC – Eight local and foreign industry associations have proposed the Government postpone the minimum regional wage hike until January 1, 2023, instead of July 1 this year as proposed by the National Wage Council.
The eight associations comprise the Japan Business Association in Vietnam, the Vietnam Association of Seafood Exporters and Producers, the Vietnam Textile and Apparel Association, the Vietnam Electronic Industries Association, the Food and Foodstuff Association of HCMC, the Vietnam Timber and Forest Products Association, the Vietnam Plastics Association and the Vietnam Association of Motorcycle Manufacturers.
Most of the members companies of these associations are active in labor-intensive industries.
According to these associations, the Covid-19 pandemic left tremendous impact on many enterprises in 2020 and 2021. The pay raise delay will give them time to recover.
The difficulties caused by the pandemic remain in place as the number of Covid-infected workers remains high and new coronavirus variants are threatening production activities, the local media reported.
If the minimum regional wages are increased from July, employers would find it hard to cope. Their production and financial plans were done at the end of last year, so it is impossible to adjust up prices of products to offset any cost increase.
Many businesses revised up salaries for their staff early last year and early this year.
They would find it hard to fulfill orders if costs rise. An alternative for them is to lay off workers or scale down production.
At a meeting on April 12, the National Wage Council approved raising the minimum regional wages by 6%, or VND180,000-260,000 per month, from July 1.
If getting the Government’s approval, the minimum monthly wages in Regions 1, 2, 3 and 4 would increase to VND4.68 million, VND4.16 million, VND3.64 million and VND3.25 million, respectively.
According to the National Wage Council, the minimum regional wage hike would send the production costs of enterprises rising by an average of 0.5%-0.6%. Textile and garment enterprises would see the highest cost increase by 1.1%-1.2%.
Despite agreeing with the minimum regional wage hike, the Vietnam Chamber of Commerce and Industry proposed an higher increase of 3%-5% from early 2023.