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Raise in wages a timely move: experts
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A customer at the Nguyen Trai Hospital in Ho Chi Minh City. The hospital director is less than happy about the new salaries ordered by the government because the hospital will have to raise some fees and cut expenses.
The government on Monday said the basic salary would increase by more than 20 percent starting next month, but opinion is divided on the timing of this move.


The salary increase from VND540,000 (US$30.38) to VND650,000 ($36.57) a month will take effect at all government agencies, state-owned companies, as well as agencies and companies formed and operating under Vietnam’s laws.

The government also said it is prepared to stop any unreasonable increase in prices of essential goods and services following the increase in minimum wages.

Pension and other support for retirees will be raised by 5 percent.

Funds for the salary increase at administrative offices will come from 10 percent of their regular expenses.

Profit making enterprises will use at least 40 percent of their net income to pay for the increased wages, while health agencies will use 35 percent of their profits for the purpose.

Pham Minh Huan, head of the wages department under the Ministry of Labor, Invalids and Social Affairs, said the salary increase can be considered an effort to stimulate consumption.

The 20 percent increase is suitable considering the current inflation rate of 11.3 percent, Huan said.

He said concerned agencies will quickly issue instructions for implementing the salary increase.

“I think the government has made all necessary preparations before announcing the increase, so I’m sure that laborers will enjoy new salaries next month.”

Tran Hoang Ngan, vice principal of the Ho Chi Minh City Economics University, said salaries should have been increased from January to stimulate consumption and prevent recession.

Around two million people get their salaries from the state budget in Vietnam.

“The salary increase directly impacts a small number of people but it will have a domino effect,” Ngan said.

Financial expert Dinh The Hien also agreed that the salary increase is good for consumption, which is still low.

Hien said the employers deserve higher wages.

However, those who have to pay more to their employees think that this is not the right time for an increase in wages.

Hoang Ve Dung, general director of the Duc Giang Garment Company in Hanoi, said “the salary increase will raise the running costs for businesses.

“I think the government should delay the salary increase to sometime later when the economy really recovers and companies have more money to pay more.”

Dung said businesses are now facing a hard time selling their goods and services. Those that have more staff will face more difficulties.

Director Ly Le Thanh of Nguyen Trai Hospital in HCMC said every time the government orders higher wages, the hospital has to cut bonuses and other similar expenditures while raising its service fees.

Some fees have long been fixed by the government, like the check-up fee of VND3,000 ($0.17), Thanh said.

The hospital employs 800 doctors, nurses and other officials, so the total salary increase would be a lot, she said.

Do Hoang Gia, director of the Gia Dinh People Hospital in HCMC, said the hospital had to cut its expenditures by at least 10 percent every time it’s asked to raise the salary.

The last salary increase amounted to VND90,000 ($5.06) per person and the hospital had to spend a further several billion dong a year on paying its 1,400 doctors and officials, Gia said.

Reported by Thanh Nien staff