WageIndicator in Vietnam: Start by Upgrading the Minimum Wage

By Dong Thi Thuong Hien, manager Luong.com.vn

Problems in Vietnam

The Minimum Wages are regulated by the state and very low. Real wages of workers only meet 60-72% of their nutrition needs (results from a survey of Institute for Workers and Trade Union - VGCL). Wages are simply not enough to reproduce the labor force, i.e. keep it healthy and productive. It is difficult to implement policies which ensure fair and reasonable wages. Employers take the Minimum Wage as the reference pay, i.e. they tend to pay only a little bit higher.

The bargaining power of workers is very weak. Competition for jobs is fierce and they have little knowledge of wages to negotiate well. Because of that they will sign the contracts, even when wages are too low to make ends meet. Collective bargaining agreements are highly formalistic, and in the non-state sector (private enterprises, FDI-companies) the proportion of CBAs is low (only 55-65%).

The awareness of all parties on the labor market with respect to labor law and regulations, CBAs, wages etc. is rather limited.

Expectations about What WageIndicator Can Do

WageIndicator/Luong.com.vn can become the centre which provides information on Minimum Wages, living wages, labor law, rights and obligations relevant to wages, also as agreed in CBAs for reference use by all parties who entertain labor relations. Its databases, cost of living survey, Salary Check, salary survey, CBAs, Minimum Wages and labor law will be widely used by all parties who have a stake in the labor market in Vietnam. Until now Vietnam has no such centre!

Luong.com.vn would provide the public with transparent information by region and by sector for free consultation in their negotiations and bargaining processes, to be used before signing labor contracts and CBAs. Luong.com.vn might even become the reference source for ‘wage guidelines’ in Vietnam, and thereby diminish the prominent place the Minimum Wage still has in wage setting. Primarily wages would be determined through negotiations, based on the Wages in Context provided by Luong.com.vn. This would lead to progressive scales with perspective.

Luong.com.vn would also be a library of labor laws in Vietnam. The website will allow free download of legal documents and CBAs. This service will attract more visitors, because the number of people searching for legal documents increases. Presently some websites in Vietnam offer this possibility already, however these demand charges and a user login which makes access difficult, especially for workers who are rather low-tech still.

How to Make it Happen

When it comes to web-content certain issues must be tackled:

  • Regularly update and add information: the current information on the website is static and poor
  • Improve the lay-out and the logic in the presentation: presently it still is difficult to find the proper information
  • Add library of labor law and regulations related to wages, and CBAs
  • Open access for users to upload/download comments, questions and CBAs from their workplaces
  • Make wages sector-specific: civil service, public sector and private enterprises.

 

Technical issues to be solved are:

  • Introduce Luong.com.vn to a wider audience, add general information about luong.com.vn (vision, function, contact, link with WageIndicator)
  • Introduce Luong.com.vn to other media and create links
  • Build an alliance with trade union officers, workers, employers, lawyers, researchers and possibly other labor market stakeholders so that they can send updated info on wages, CBAs, and answer user questions
  • Print brochures, flyers and stickers to introduce Luong.com.vn, since the number of workers with direct access to the internet is still very low.

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