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VITAS comments on Draft Government Report on Minimum wages

17/03/2021 03:13 PM
Responding to Official Letter No. 531 / LĐTBXH-QHLĐTL dated 01 March 2021 by MOLISA on consulting the Draft Government Report on the minimum wage, VITAS would like comment as follows:

1)    Regarding 2021 regional minimum wage adjustment

As a member to National Wage Council, VITAS participated in negotiation sessions, analyzed the socio-economic situation, influencing factors to minimum wage adjustment under the severe impact of Covid-19, as well as participated in voting on the plan not to increase the regional minimum wage in 2021. The National Wage Council has reported to the Government this plan and been approved accordingly.

As of now, although the whole political system has drastically engaged in realizing its dual goal of fighting against epidemics and economic development, the effects of the Covid-19 epidemic are extremely heavy. The business community “Health” as analyzed in the Draft Report is at the least optimistic level and very fragile. Particularly, Vietnam's textile and garment industry, in 2020, only reached 35.06 billion USD, down 9.82% compared to 2019 (38.9 billion USD), not equal to the performance level of 2018 (36.2 billion USD). During the first 2 months of 2021, it is estimated to reach 5.9 billion USD, an increase of 7.1% over the same period in 2020. If the Covid-19 does not develop towards further complexity, it is expected that in the whole year 2021, the industry's export turnover will reach about 38 billion USD. (less than $ 38.9 billion in 2019).

Meanwhile, according to the calculation of the National Wage Council with the forecast that CPI in 2020 will increase by 4%, the current minimum wage is 1.51% higher than the minimum living standard. In fact, the CPI in 2020 will only increase by 3.23%, so the minimum wage is even higher than the minimum living standards by 2.28%.

In addition, due to the negative impact of Covid-19 on the economy, the increase in the base salary among cadres, civil servants, public employees, armed forces, and those who receive salary from the State budget has also been delayed by another year to mid-2022.

Therefore, we completely agree with the proposal by MOLISA of not raising the minimum wage in 2021 to reduce difficulties among businesses and facilitate conditions among businesses for job guarantee, not laying off workers.

2)    Regarding changing regional minimum wage adjustment timing to July 1 every year instead of January 1

VITAS strongly agreed with the proposal by MOLISA on maintaining the time of adjusting the regional minimum salary from January 1 as the practice of wage adjustment within at least the past 20 years in Vietnam. The bases given referred to international experience, with the beginning of the fiscal year of Vietnam from January 1 and ending on December 31 every year ... are completely valid. This timing is also favorable for construction and implementation of production plans, finance, labor, etc. among businesses.

In addition, we also agree that given the conditions of unusual fluctuations, if it is necessary to change the wage adjustment timing of a certain year, it should be proposed that the Government to assign National Wage Council to study proposal, report to the Government for consideration and decision.

3)    Others:

It is suggested to review and correct some typos in the Draft.

Attached file: Official Letter No.31/2021/VITAS-CS

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