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Businesses want self-determination on wages   2012-05-24 - Tien phong

Businesses have voiced their opposition against the deep intervention of the state to their wage policies. Meanwhile, the Vietnam Chamber of Commerce and Industry (VCCI), the organization representing businesses, also believes that it would be better to let businesses define their payrolls.


Tran Chi Dung from VCCI said the decisions by the government to raise the minimum wage level always have impacts on businesses. Every time when the decision on new minimum wage levels is made, the market would be shaken with the prices of goods and services all increasing. Once the input material prices increase, businesses’ production costs would increase which would make products less competitive.

Also according to Dung, there are some enterprises which pay the sky high pay levels of tens of thousands of dollars. But such businesses are scarce. Meanwhile, the remaining 500,000 businesses and 3 million business households are struggling to survive the difficulties. A lot of businesses reportedly have to borrow money to pay workers.

“We need to recognize that the wage adjustment would heavily affect businesses and indirectly affect the social security and the national economy,” Dung said.

Commenting about the wage policies, Dung said employers want to define the pay levels themselves based on the market rules, the productivity of laborers and the business performance of enterprises.

“In such difficult circumstances, employers and employees need to share difficulties,” Dung said.

“In developed economies, workers’ salaries could be reduced in economic crisis. Therefore, it’s not a must that in economic difficulties which make workers’ life hard, we have to raise laborers’ wages,” he continued.

“We need to keep an overall look into the national economy and set up the policies for the sake of the whole national economy and the policies beneficial for the businesses’ recovery,” he concluded.

Therefore, Dung said that when calculating minimum wages, policy makers need to consider the production and business efficiency, enterprises’ profits.

Analysts have shared the same viewpoint, saying that it would be better for the State to lessen its intervention in businesses’ performance, and let businesses define the wage levels themselves. Especially, the wages to be defined by businesses’ bosses could be seen as a “know how” in their business strategies to attract talented workers.

However, the suggestion has raised controversy. Dang Nhu Loi, former Deputy Chair of the Social Affairs’ Committee, if businesses have full power to define wages for their workers, the labor market would be absolutely floating.. Meanwhile, the Vietnam Labor Confederation remains not powerful enough to negotiate with bosses and protect the interests of workers.

According to Loi, in many enterprises, the average wages are very high, while in fact, the salaries workers receive are very low. Therefore, it would be a big trouble if the State does not make intervention in this case.

“This happens with private and foreign invested enterprises. They make fat profit, but they always complain that they take loss,” Loi said.

In reply, Dung said that wage is also considered a kind of goods which needs to be defined by the market. He still believes that the wage policy and the pay levels need to be kept as a business secret.

Agreeing with Loi, Hoang Thi Hoa, a National Assembly’s Deputy, said if the State does not intervene businesses’ wage policies, it would be unable to control the wages.

“I know some foreign invested enterprises which obey Vietnam’s wage policies. However, there are the workers who get 2 million dong a month only over the last eight years, since they began working for the enterprise,” Hoa said.

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