On the morning of August 9th, the National Wage Council held its first session to discuss the regional minimum wage for the year 2024.

On August 9th, the National Wage Council convened its first session to discuss the regional minimum wage for the year 2024.

According to information from the Vietnam Chamber of Commerce and Industry (VCCI), after analyzing and listening to opinions, out of 15 council votes, 14 were in temporary agreement not to consider recommending a plan to adjust the 2024 regional minimum wage. Instead, they will continue to monitor and assess the development of the economic and social situation, production and business activities, and the labor market. Specific adjustments will be considered towards the end of the fourth quarter of 2023 to make them suitable for the reality.

During the meeting, Mr. Hoang Quang Phong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), provided an update on the global economic situation, which continues to face difficulties with a forecasted slowdown in growth and an increasing risk of short-term recession due to inflation. The global financial system is weakening, and the conflict between Russia and Ukraine shows no signs of stopping.

In Vietnam, key export items have decreased compared to the same period in 2022, such as textiles, electronics components, various types of steel, wood chips, cassava starch, various types of textile fibers, and stone powder.

Especially, alongside new labor recruitment, the issue of labor attrition continues, with the number of workers leaving their jobs being either greater or almost equal to the number of newly recruited workers. This situation mainly affects FDI enterprises with fluctuating labor numbers each month.

The reduction in work hours for laborers is attributed to difficulties faced by units and businesses in their production and business activities. Some units and businesses are unable to acquire raw materials, affecting production, and even many businesses are unable to secure new orders, leading to high inventory levels.

Notably, Mr. Hoang Quang Phong pointed out that in the coming period, given the challenging situation faced by businesses in particular and the economy in general, the number of jobs in the formal sector is decreasing day by day, and the prospects for the short-term recovery of business production and operations are not optimistic.

The difficulties and challenges impacting economic growth in the near future remain substantial, with many more unpredictable factors, especially fluctuations in oil prices, raw material inputs, inflationary pressures, high production costs; supply chain risks; reduced and weakened demand from major export markets; policy adjustments by major economies and trading partners leading to significant declines in export orders for businesses; challenges in accessing loans for enterprises, especially small and medium-sized ones; resulting in labor reductions and increased job losses, which negatively affect the labor market and the production and business activities of enterprises.

Based on this reality, labor user representatives, despite agreeing on the plan to adjust the minimum wage, emphasize the need for thorough research, discussions, and careful calculations to determine an appropriate timing for the adjustment.

"At present, businesses are striving to maintain their operations and make efforts to diversify products and consumer markets to adapt to the rapid and unpredictable fluctuations in the global trade. Adjusting the minimum wage will affect the cost of living and thus the livelihoods of laborers. Therefore, it is necessary to continue implementing support policies to alleviate difficulties and provide 'oxygen' for the 'health' of businesses to recover as soon as possible," emphasized the Vice Chairman of VCCI.

Despite agreeing on the plan to adjust the minimum wage, emphasizes the need for thorough research, discussions, and careful calculations to determine an appropriate timing for the adjustment, shared by the Vice Chairman of VCCI.

Specifically, solutions include continuing the timely and effective implementation of the deferral of VAT, corporate income tax, personal income tax of employees, trade union fees, and others.

Continuing to strongly improve the investment and business environment, attracting effective investment, especially in the FDI sector, to generate more employment opportunities, attract supporting industries, and other businesses within the supply chain for FDI enterprises; supporting trade promotion, exploring new markets and new orders to replace struggling old markets and products.

Continuing to maintain and increase the frequency of dialogues with businesses and business associations to listen, absorb suggestions, understand the difficulties of the business community, and promptly propose rapid and effective solutions to support businesses.

Meanwhile, in this first official session, labor representatives proposed an increase of 5-6%. The postponement of the National Wage Council's work program allows all parties to have a clearer assessment of the labor market, employment, and the recovery of businesses before recommending a specific plan to the government.

As per the tradition of previous years, the National Wage Council meets in July-August each year to make recommendations to the government regarding the applicable regional minimum wage for the following year. The recommended regional minimum wage plan is based on the consensus of the majority of council members.

Earlier, in 2020, following the impact of the COVID-19 pandemic, the National Wage Council recommended no increase in the regional minimum wage for 2021. Subsequently, in 2021, the council also recommended no increase in the regional minimum wage at the beginning of 2022. By the start of 2022, as the COVID-19 situation gradually improved and the economy began to reopen, the National Wage Council convened again and recommended an increase in the regional minimum wage starting from July 2022. This recommendation was later endorsed and implemented by the government.

Source: Business Forum Magazine.