Labor news

Vietnam ratified the International Labor Organization’s fundamental convention on collective bargaining in mid June (convention 98). This is convention 98, which protects against anti-union discrimination. There is another Convention (87) that allows for independent trade unions., and Vietnam plans to ratify that by 2023.

Right now there is just one union, the Vietnam General Confederation of Labour (VGCL) which is part of the communist party. And this brings up an interesting (but naive) question: why does Vietnam need labor unions, if it is a socialist republic led by the Communist Party of Vietnam? Surely worker rights should be protected as a matter of course. But it doesn’t seem to be the case.

There are a number of strikes in Vietnam, around 300-500 strikes a year, based on government figures that are somewhat suspect. The majority are in Ho Chi Minh City and its neighboring provinces - 60-80%. These are mainly against foreign companies, but increasingly private domestic companies as well. While strikes are legal (since 1994), for all intents and purposes it is impossible to have a legal strike. So all of these wildcat strikes are illegal. And they get results! (You can read about details of a strike at a shoe company here).

But back to joining the ILO. This article in Jacobin, my favorite socialist periodical/blog, talks about how the new ILO ratification comes for two reasons. First, new international treaties require more worker rights than previously given by the government. And second, because the government wants to reduce strikes and wants them to move into a formal negotiation between workers and employers.

What we may see is some sort of short-term union that is formed just to negotiate with the employer. But that these unions will not be able to grow beyond negotiating basic wages and conditions because the government doesn’t want them to. The government has increasingly been uninterested in civil action and has cracked down on protests or anti-government speech. I doubt this will change. I think that will limit unions ability to play a bigger role in society and politics. But for the small (but very important) role of negotiating between company and workers, it could be helpful (this article is much more optimistic). Unfortunately if workers demands push wages too high, we will likely just see a shift of manufacturing to the next cheapest place on the list (Bangladesh? Cambodia?).

Minimum salary: In other labor news, the government will raise the minimum salary by 5.5% in 2020. It will be VND4.42m ($191) per month in urban areas (HCMC, Hanoi), and VND3.92 for Region II, rural areas of the two big cities and smaller cities like Da Nang, Can Tho, Hai Phong). Region III will not be at VND3.43m, and the rest of the country at VND3.07m. The difference between cities and the rural areas are 44%.

This increase is basically in line with what the country has done recently: “Vietnam increased regional minimum salary by 7.3 percent, 6.5 percent and 5.3 percent in 2017, 2018 and 2019, respectively.”

Finally, workers needed! Ho Chi Minh City will need 155,000 new workers in the second half of 2019, according to the municipal government.