Vietnam, workers strike over wage levels frozen since 1999
Low pay” the lowest in the region. The need to favour foreign investment prevailed over the needs of the workers. 900 strikes over a 10 year period.
HO CHI MINH CITY - Vietnamese premier Phan Van Khai has once again intervened in the search for a solution to ongoing strikes which are crippling the output of many foreign companies, as workers ask for a pay rise in accordance with state law.
Tens of thousands of workers in the southern industrial parks (IPs) and export processing zones (EPZs) have been on strike through January, demanding that the government adjust basic wages to meet inflationary trends and the rising cost of living. The premier has advised the Ministry of Planning and Investment (MPI) to propose solutions to the strikes in provinces and cities hosting foreign direct investment (FDI) companies.
The intervention is a sign of government recognition that workers at the FDI companies are unhappy with a decision to postpone to April a 40% increase in basic wages, originally proposed to become effective from the beginning of February.
Official statistics show that Vietnam had until December attracted close to US billion in FDI, much of it from Taiwanese and Korean companies looking for labour that is cheaper than in competitive China, where basic wages are currently a month.
For Vietnam's FDI companies, basic wages were initially set at about -, but the government in 1999 "adjusted" it to please investors to between and (depending on the location). It has remained so despite the rising cost of living.
Communist Vietnam's labour codes allow workers to go on strike to defend their rights. However, strikes must meet legal criteria. Thus the current spate of strikes is illegal as they were organized spontaneously, without a trade union – explains Pham Van Hung, head of labour management for HEPZA, in Ho Chi Minh City' – it was feared that these could present serious opposition.
The proposed increase does not satisfy the striking workers, it has also sparked protests amongst workers in Vietnamese companies, who considered themselves discriminated against and are threatening to come out on strike for a fair wage. “I earn 38 dollars a month – protests Nguyen Thi Phuong, who works in a clothing factory – and I haven’t had a raise in over 10 years”. In many companies workers with years of experience receive the same wage as those who are staring out.
If the government fails to intervene immediately on the question, experts warn that the strikes will spread : in Ho Chi Minh City there are over 700 foreign companies which employ over 130 thousand workers. A labour Ministry report shows that there have been over 900 strikes in less then 10 years, above all asking for fair wages and improved social security.
AsiaNews.it - January 30, 2006.
Vietnam's strikes spread
HO CHI MINH CITY - Prime Minister Phan Van Khai's intervention this week to find solutions to strikes raging through Vietnam's foreign-owned companies is a sign the unrest is turning critical and beginning to infect local enterprises. Tens of thousands of workers in the southern industrial parks (IPs) and export processing zones (EPZs) have been on strike hrough January, demanding that the government adjust basic wages to meet inflationary trends and the rising cost of living.
The Nguoi Lao Dong (Worker) newspaper said on Tuesday that the premier had advised the Ministry of Planning and Investment (MPI) to propose solutions to the strikes in provinces and cities hosting foreign direct investment (FDI) companies.
The intervention is a sign of government recognition that workers at the FDI companies are unhappy with a decision to postpone to April a 40% increase in basic wages, originally proposed to become effective from the beginning of February.
Since the country joined the market economy, Hanoi has been trying hard to attract foreign investors to Vietnam by offering them incentives, including a cheap and stable labor environment.
But lately, it has become difficult to balance the interests of workers and those of foreign investors, as the ongoing restiveness on the issue of "basic wages" has clearly shown.
Official statistics show that Vietnam had until December attracted close to US$8 billion in FDI, much of it from Taiwanese and Korean companies looking for labor that is cheaper than in competitive China, where basic wages are currently $63 a month.
For Vietnam's FDI companies, basic wages were initially set at about $45-$50, but the government in 1999 "adjusted" it to please investors to between $35 and $45 (depending on the location).
However, basic wages since have not kept pace with inflation and the rising cost of living in Vietnam, leading to the current worker unrest.
Early this month, workers at FDI firms such as Kollan, Latek, Danu Vina, Hugo and Sprinta as well as Quint Major Industrial companies in Ho Chi Minh City's Linh Trung EPZ and their colleagues at Chutex and Plantation Grown Timbers in Binh Duong province's IP at Song Than walked out, saying they could no longer bear the unrealistic wages.
Communist Vietnam's labor codes allow workers to go on strike to defend their rights. However, strikes must meet legal criteria.
"We support strikes that were prompted by delayed payment of salaries and labor-law violations," said Pham Van Hung, head of labor management for HEPZA, Ho Chi Minh City's authority for IPs and EPZs.
The current spate of strikes is illegal as they were organized spontaneously, without a trade union, Hung said. Timely intervention by labor unions could have prevented strikes, he said.
Immediately after the strikes began, the Ho Chi Minh City Labor Federation began working with affected companies, some of which admitted to paying low salaries, though insisting that they were acting within the state policy framework.
"Wages are low in relation to the cost of living," said Dao Ngoc Hoang, an official at Dong Nai province's Department for Labor and Social Affairs.
Last week, the prime minister issued a decree raising the minimum monthly salary of unskilled workers at FDI enterprises by 40% from April. In the case of skilled workers, the lowest level of their salaries must be at least 7% higher than the minimum rates.
While the new decree did not satisfy workers at FDI companies, it stirred up bitterness among employees at Vietnamese-owned companies who felt discriminated against and began a separate job action.
"If workers at FDI companies could not live with their basic monthly salary, how could we at locally owned companies as our minimum wages are even lower?" said Nguyen Van Tu, a worker at a private footwear company on the outskirts of Ho Chi Minh City.
Now that workers at FDI companies have succeeded in asking for a higher basic salary, Tu and his co-workers think they should do the same. "We just want to remind the government of our hard living conditions," he said.
"While everything became more and more expensive, our basic salary remained the same and that for many years," Tu said. "With so little income, the lives of workers at local companies are becoming increasingly difficult and many work overtime for extra money, often until exhaustion."
Nguyen Thi Phuong, a worker at a private garment factory, said: "Only a leader who dares to live in Ho Chi Minh City with only VND600,000 [$38] per month could understand our lamentable conditions." Phuong has been working for 10 years without a raise.
But for officials in Ho Chi Minh City, workers' living conditions are not their biggest concern. Most of them fear the rising number of strikes will damage the investment environment in the IPs and EPZs in the city, which are currently home to 700 enterprises employing more than 130,000 laborers.
Pham Duy Bac, a HEPZA official, said the strikes were spreading quickly. "This situation will continue and some companies will have to close to protect their assets. If the government does not quickly issue a decision on salary adjustments, it will be difficult to prevent strikes."
Bac is right to worry. A report by the Labor Ministry shows that nearly 900 strikes have taken place in the country in the past decade. "In most of the cases, disputes over payment and social welfare were the main reasons behind the strikes," he said.
Though there have been improvements to workers' rights in some factories and plants, there are still businesses that do not bother to outline detailed salary regulations over raises and bonuses, Bac said. Some plants still use the basic salary structure as the only basis for employees' pay.
Many workers with significant work experience and professional skills are still paid at the same rate as unskilled entry-level workers. Some employers also fail to give allowances for work in harmful or dangerous conditions.
"If only the government had taken a closer look at our interests, we would not have walked out," said Tran Van Ba, a worker at a private footwear company.
By Tran Dinh Thanh Lam - Inter Press Service - January 27, 2006.
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