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
through 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.
