Businesses do not oppose wage increases but pay attention to adjustment levels

The Japan Chamber of Commerce and Industry in Vietnam (JCCI) has sent a document to the Prime Minister and relevant ministries and branches regarding the adjustment of regional minimum wages in 2024.

The survey "Current situation of Japanese enterprises investing abroad" with more than 600 enterprises by JCCI shows that more than 46% of enterprises predict that revenue will "decrease" or "maintain" compared to 2022.

Regarding labor costs alone, more than 75% of Japanese businesses said that increasing labor costs are the biggest risk when investing here in the future.

According to JCCI, Japanese enterprises investing in Vietnam have increased wages by 5.4% from 2020 to 2021, and 5.8% from 2021 to 2022, and are expected to increase by 5.9% from 2022 to 2023. This increase rate is higher than that of ASEAN countries such as Thailand, Indonesia and the Philippines.

Calculating the total number of businesses that have increased salaries in 2022, up to 96% of businesses have increased salaries between 2022 and 2023.

As a result of these wage increases, the average wage of Japanese manufacturing enterprises in Northern Vietnam reached more than VND5.1 million (regions 1, 2, 3 and 4), much higher than the regional minimum wage of VND4.68 million in region 1.

Doanh nghiệp không phản đối tăng lương nhưng chú ý mức điều chỉnh - 1 — Workers' representatives want to increase regional minimum wages to compensate for inflation (Illustration: Son Nguyen).

Therefore, JCCI recommends maintaining the regional minimum wage in 2023. However, this unit also does not object to adjusting the regional minimum wage from January 2024, but it is necessary to pay attention to the adjustment level.

Enterprises have already adjusted their own wages, so if the minimum wage is adjusted to increase sharply, it will make it impossible for enterprises to bear the burden of labor costs. Thus, labor disputes can easily arise in enterprises that are not cost competitive.

Instead of deciding based on indicators such as CPI, JCCI recommends that the National Wage Council needs to investigate the actual wage level and propose adjustments according to the actual situation.

According to JCCI, the Government is developing a roadmap to adjust the minimum wage and setting medium-term goals, but the domestic and foreign economies are always subject to unpredictable changes, making it difficult to predict.

Therefore, the minimum wage should be determined based on economic indicators and annual economic trends.

Previously, at the end of the first meeting held on the morning of August 9, the National Wage Council agreed to hold the next meetings in the fourth quarter of 2023 instead of in July and August as usual.

The Vietnam General Confederation of Labor believes that the minimum wage needs to be adjusted according to the consumer price index so that workers' real incomes do not decrease. The union wants the minimum wage to increase by 5-6% in 2024.

Workers' representatives share the difficulties with businesses. However, workers also need to have their wages adjusted to compensate for inflation and improve their living standards.

Vice President of the Vietnam Federation of Commerce and Industry (VCCI) Hoang Quang Phong said that considering salary increases should be delayed and should be decided based on economic and production parameters in the coming time.

The reason for making the above proposal, the employer representative explained, is that business life is difficult. The highest demand of workers at this time is to go to work and businesses want to create as many jobs as possible for many people. Many businesses are facing many difficulties but still struggle to maintain jobs for workers.

Source link