Garment makers fear minimum wage rise

Aug 30, 2011. Apparel firms fear a rise in the minimum wage will lead some foreign investors to move out of Vietnam

Vietnam’s textile, garment and footwear industries are likely to be hardest hit by a government decision to increase minimum wages by up to one-third from 1 October.

Wages are being raised to help workers cope with surging levels of inflation – and to reduce the likelihood of strikes.

According to plans announced last week by Prime Minister Nguyen Tan Dung, the new pay levels will vary depending on whether they apply to rural or urban areas. Click this link for detailed information.

The move brings forward a pay rise that had been planned for 1 January 2012, with the new wages now running from 1 October 2011 until 31 December 2012. It also means there will be no further wage adjustment next year.

According to the Ministry of Labor – Invalids and Social Affairs (MOLISA), the new minimum wage brings Vietnam in line with Laos, Indonesia and the Philippines.

However, the labour-intensive textile, garment and footwear industries will be hurt by the wage rise – and are calling for a delay to the decision, according to Mrs Dang Phuong Dung, secretary general of Vietnam Textile and Apparel Association (Vitas).

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