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Is cost competitiveness due to poor wages, question experts

04
Dec '08
Vietnam for long has held the advantage of being one of the lowest cost producers. But union leaders are now questioning the very basics of being a low cost producer. The unions believe that the main reason for this tag is that the workers are paid very low salaries and not for any other reason.

The labour union leaders are citing statistics of the labour strikes in the current year vis-à-vis the previous year. Compared to 541 strikes in 2007, an awesome 650 strikes have been registered in just the first eight months of the current year. Most of the strikes have taken place at Taiwanese and Korean invested companies.

According to them, the textile industry is the biggest culprit among the low paymasters, followed by the timber processing and footwear industry. Average salary in these sectors in HCM city reaches just US $65-70 per month with the wage scale dipping to a mere $53-65 per month in the surrounding provinces.

According to them the employees working in Vietnamese owned companies are better off in terms of wages than their counterparts in companies managed by foreign enterprises. But government officials counter by saying that the government can only set the minimum wage level and monitor that it is being administered and do not accept the argument that the minimum wage level is very low.

They add by saying that it is the poor negotiating skills of the labour unions which is the reason for the plight of the workers and the market demand and supply levels and suggest that workers should negotiate vigorously to get the best package possible from their employers.

Fibre2fashion News Desk - Vietnam


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