The National Wage Council has announced that the regional minimum wage will rise by six per cent from July 1, 2022. This increase is equivalent to a rise of VND180,000 - 260,000 (US$7.86-11.36), which varies between regions. An increase in wages will definitely be a helpful boost to the workers' productivity and create sustainable growth for businesses. However, eight business associations have proposed a delay of the increase of the regional minimum wage until early next year, to give them more time to prepare after the COVID-19 pandemic. Around this issue, many businesses in Da Nang are in support of the increase, but there are many different opinions on the salary increase roadmap.

Workers is expecting for a salary increase to improve their living conditions. Workers are seen at the Sinaran Viet Nam Co., Ltd in the Da Nang Industrial Park, Son Tra District. Photo: M.QUE

Salary increase is needed but roadmap should be taken into account

Previous regional minimum wage increases have been adjusted with an annual cycle, whereby, the regional minimum wage in 2020 rose by 5.5% as compared to that recorded in 2019. The regional minimum wage in 2019 increased by 5.3% from that in 2018.

However, due to the COVID-19 impacts, the regional minimum wage in 2021 has not yet increased. Therefore, according to businesses, an increase in the regional minimum wage is inevitable in the near future, but a suitable roadmap is needed.

According to Mr. Le Hoang Khanh Nhut, the General Director of the Da Nang Rubber Joint Stock Company, his business is now in favour of a need to increase the regional minimum wage by 6% from July 1 as proposed because at this time, the local economy is recovering and gradually stabilising.

Mr. Nhut said that, in order to keep employees’ long job attachment to the company, salaries, bonuses and other benefits need to be offered to them. 

As for smaller businesses, a 6% hike in the regional minimum wage from July 1, 2022 is still manageable.

According to Ms. Nguyen Thi Thinh, Director of Trung Khoa company Limited based in the Da Nang Industrial Park, Son Tra District, although the company has only operated at about 60% of its capacity so far, the salary increase for employees from July 1 is still reasonable, because currently commodity prices are skyrocketing which cause workers to bear a lot of costs.

Therefore, it is high time for businesses to increase wages to support workers. Increasing wages helps businesses attract workers, restore production capacity, and motivate employees to stay with their employers.

Meanwhile, Mr. Nguyen Van Phu, Director of Daiwa Vietnam Co., Ltd based n the Hoa Khanh Industrial Park, Lien Chieu District said that the adjustment of the regional minimum wage is inevitable, but it is more reasonable to kick off from January 1, 2023.

In reality, the COVID-19 pandemic adversely impacted numerous enterprises, which now need more time to make a recovery and proceed with the planned wage rise.

The scheduled wage increase may prompt many businesses to cancel contracts signed with their partners as they cannot cover the additional cost.

Workers are in a desperate need of a wage hike amidst the skyrocketing commodity price. Workers are observed being on duty at the Kane-M Da Nang Co., Ltd in Hoa Khanh Industrial Park, Lien Chieu District. Photo: M.QUE

Employees in desperate need of wage hike

Da Nang belongs to Region 2, if the region's minimum wage increases by 6% according to the National Wage Council, it will increase by VND 240,000/month.

Many workers in industrial zones is looking forwards to enjoying a salary hike as soon ass possible amidst the soaring commodity price whether the increase is more or less.

Ho Thi Le whose hometown of Nghe An, a worker at the Yuri ABC Company Limited in the Hoa Khanh Industrial Park, Lien Chieu District said she and her husband are immigrant workers staying away from home so they now encounter may financial troubles triggered by skyrocketing prices of fuel and food.

“Early salary increase for employees is necessary. Everyone is looking forward to it”, said Le.

Similarly, Nguyen Thi Ly, a worker at the Daiwa Viet Nam Co., Ltd in the Hoa Khanh Industrial Park, Lien Chieu District said that, in addition to working shifts at this company, she sometimes sells fruit and food in a bid to increase her income.

Therefore, the increase of VND 240,000/month is not much, but it brings a great joy for workers when they have to face difficulties to earn a living as currently.

In reality, some workers have had to resort to their personal savings or family support, borrowing money at high interest rates, or choosing to exit the social insurance scheme by making lump sum withdrawals of their social insurance premiums.

Mr. Nguyen Duy Minh, Chairman of the Da Nang Labour Confederation, said that his agency and its all-levelled chapters hold a view that a regional minimum wage increase of 8% would be more reasonable in the face of ‘consume price fever pitch’.  However, the proposed increase of 6% also partly help to enhance workers' living conditions.

It can be seen that workers have faced many difficulties over the past time, so the increase of the regional minimum wage is very necessary to support them and should be done soon. If it is delayed, there will be even more difficulties facing workers amidst public fears over the upward trend on commodity prices in the near future.

Reporting by MAI QUE – Translating by A.THU