Vietnam textile association opposes minimum wage hike

The Vietnam Textile and Apparel Association (VITAS) recently proposed that the regional minimum wage not be raised next year as several enterprises are already struggling with wage hikes in the last decade. The National Wage Council decided a 6.5 per cent raise in the regional minimum wage for 2018 and submitted the proposal to the government for approval.

The proposed monthly wage hike of US$8-10 a month is the lowest raise ever offered, according to a report in a Vietnamese newspaper. VITAS said minimum wage in domestic enterprises increased by 21.8 per cent between 2007 and 2017, leading many to reduce workers’ annual bonuses and use machines instead of labourers.

Constantly increasing minimum wage reduces competition and shifts the labour structure, preventing enterprises from expanding production and robbing labourers of job opportunities, VITAS vice chairman Truong Van Cam said.
Social insurance premiums also increase when minimum wages increase. Several textile enterprises in the Hung Yen province have closed down, a garment company chairman said.

VITAS has also proposed that adjustments be made to address what it feels as drawbacks in Labour Code 2012, which covers overtime, severance pay, unemployment benefits, health and occupational safety and labour discipline.