Poor wages dampen enthusiasm among State employees and affect the delivery of public services.
Most workers rely only on their salary to pay for their living expenses, with little in the way of investments earning extra income. Salaries in general and the minimum wage in particular therefore have a very important role to play in the daily lives of most employees.
In order to enable employees to live on their salary, Article No 56 of the Labour Code regulates that the minimum wage is determined in accordance with living costs. When the cost of living rises and the spending power of wages fall, the government will adjust the minimum wage accordingly.
Mr Phung Quang Huy, Director of the Bureau for Employer Activities at the Vietnam Chamber of Commerce and Industry (VCCI), said that around the world the minimum wage is only considered a symbolic wage that relates to social security, rather than acting as an actual wage.
In Vietnam, though, because negotiations on working conditions between employees and employers remain undeveloped, the minimum wage has become the actual wage for most employees. In recent times employees, especially those in the government sector, have continually complained that their wage is too low and fails to cover the basic cost of living.
Basic consumption of an employee can include costs for food, water and electricity bills, travel expenses, and social expenses such as those for attending birthdays and weddings. For most if not all, their wage doesn’t cover these basics.
Consequently, low wages have a negative impact on working efficiency, especially among State employees, and the operation of the State apparatus.
Dr Le Dang Doanh, former Director of the Central Institute for Economic Management (CIEM), acknowledges that wages for State officials have remained low and their real value has fallen because of high inflation.
When asked by VET whether low wages would lead to low working efficiency among State officials, Dr Doanh replied, speaking as a delegate of the National Assembly, that poor pay will always equal poor performance. “When paid a low wage, employees have no motivation to work hard,” he said. “So they will neglect their tasks and do other work during office hours to earn extra income. This leads to low working efficiency.”
Moreover, according to Ms Xia Wang, Director of the Research Office at the Institute of Labour and Wage Studies under China’s Ministry of Human Resources and Social Security, low public servant wages leads to an exodus of talent and, most probably, corruption. Of a similar mind, Dr Thang Van Phuc, former Deputy Minister of Home Affairs, told local media recently that when wages don’t reflect the value of labour, public servants will inevitably lack the motivation to be committed and dedicated to their jobs. “The requirements of administrative reform as currently set out are to change public services to serve the people and development,” he said. “But low wages will never ensure high quality public services.”
Harassment by public servants has affected the reputation of public services among the population, he continued. This is a matter of concern because it relates to the trust of the people in the machinery of the State - the public service.
In an online public poll seeking the views of and experiences with public administrative procedures of 1,470 people nationwide, conducted by UNDP Vietnam and VietnamNet from June to September 2010, many respondents were dissatisfied with the behaviour of public servants. “I am an immigrant in Hanoi and do not have private housing,” a planning and investment expert said of her experience in dealing with household registration procedures in Hanoi. “When I went to register as a temporary resident with the local ward police, they demanded a lot of paperwork. Eventually they said bluntly that I had to ‘thank’ them with VND200,000 ($10), in addition to VND50,000 ($2.5) for the paperwork if I wanted to register long term.”
Dr Doanh added that besides normal harassment by public servants, there were many State officials who took advantage of their positions to make money.
Although their wages are low, these State officials own expensive cars and large houses and can send their children overseas to study. “State officials clearly enrich themselves when performing their job, and this leads to further corruption and lessening prestige for the State apparatus,” he said. With the low wages being offered, he added, it is difficult for the government sector to attract qualified and talented staff.
Since 1993 Vietnam has adjusted the minimum wage several times but the wage for cadres and public servants is still too low, meeting just 30 - 50 per cent of their needs. Consequently, 16,000 State employees resigned their positions between 2006 and 2009.
Moreover, a recent report from the Ministry of Labour, War Invalids and Social Affairs, submitted to the Standing Committee of the National Assembly, showed that from 2007 to present, 1,353 public servants in the social insurance sector resigned due to the low wages and absence of allowances, despite the heavy workload and complex nature of their jobs.
The average income in 2010 (including salary and benefits) was nearly VND4 million ($200). In 2011 their average income was increased to nearly VND4.9 million ($245).
Therefore, according to Dr Doanh, there must be basic wage reform for State officials, together with curbing inflation and reforming the State apparatus, in order to identify a suitable basic wage for employees, so that they feel assured about covering their living costs and can completely focus on their work.