According to Vietnam’s “Vietnam News” on September 16, according to the latest report released by the International Labor Organization (ILO), the minimum wage non-compliance rate in Vietnam’s textile, clothing and footwear industry sectors is only 6.6%, ranking among the seven largest in Asia. The non-compliance rate is the lowest among textile exporting countries, followed by Cambodia with a non-compliance rate of 25.6%. The highest discrepancy rate is in the Philippines, reaching 53.3%.
The extreme non-compliance rate of Vietnam’s minimum wage (i.e. the actual salary paid is lower than 80% of the country’s minimum wage standard) is only 3.8%, and the medium non-compliance rate (i.e. the actual payment of wages is 80%-100% of the country’s minimum wage standard) is 2.8%. In contrast, the actual wages of most textile workers in the Philippines, India, Thailand, Pakistan, and Indonesia are far below the minimum wage. The extreme discrepancy rates in the Philippines and India are 38.3% and 34.9% respectively. The salary income of more than 25% of Indonesian textile workers is far less than the minimum wage.
In all countries, female textile workers are paid worse than male workers, and their actual wage income is more likely to fail to meet the minimum wage standard. Vietnam has the smallest wage gap between men and women (only 5.7 percentage points), followed by Cambodia and Indonesia, and Pakistan has the largest wage gap (60.4%).
According to the report, system design such as minimum wage standards and wage structures are important factors in considering whether minimum wage compliance is improved. Vietnam is divided into four regions and implements different minimum wage standards, with monthly wages ranging from VND 2.4 million to VND 3.5 million (approximately US$108-157). The National Remuneration Council, composed of government, employer and employee representatives, adjusts the minimum wage level every year.
Although the compliance rate of the minimum wage standard in Vietnam’s textile industry is commendable, the Director of the Vietnam Department of the International Labor Organization reminded that the relevant data must be quoted and interpreted with caution. The minimum wage in Vietnam has increased significantly in the past three years, and it is necessary to study whether the high compliance rate can continue to be maintained after the minimum wage standard is increased. During 2014-2016, Vietnam’s regional minimum wage increased by an average annual rate of 12-15%, and the increase is expected to be 7.3% in 2017. Vietnam’s textile industry labor compensation compliance rate ranks first in Asia
