Prices up, salaries remain stationary

While the CPI has increased dramatically by 6.19% in the last seven months, the incomes of employees have stood still, thus lightening consumers’ pockets.

Dairy products have increased by 10-15% in price so far this year. Oil, vegetables, pork, the main foods of Vietnamese people, all have seen sharp price increases: the price of oil has risen by VND3,000/litre, vegetables and fruits by VND2,000/kg, and pork by VND4,000/kg.

Mrs Tam, who has a stand at Hom market in Hanoi, said she previously spent VND40-50,000 on a meal for three persons, but now she had to pay VND100,000 for the same meal.

Meanwhile, the incomes of most consumers have remained unchanged. According to the Ministry of Labour, War Invalids and Social Affairs (MoLISA), there are 11mil wage earners, including 0.5mil people working in foreign invested enterprises, which means that 10.5mil are eligible for salary adjustments.

MoLISA said that under the roadmap on salary reform for 2003-2007, the new turn of adjusting the minimum salary level will only come after October 1, 2007 (the minimum salary levels are now different for different economic sectors, but there will be only one level for all economic sectors by 2010). This means that those 10.5mil workers still have to wait until the end of 2007 to get raises.

A recent survey of employees’ salaries in 2007 conducted by Navigos Group showed that the average salary of domestic enterprises (both private owned and state owned) is much lower than that of foreign invested enterprises. However, it is not easy to make adjustments in salary schemes in foreign invested enterprises.

Experts have said that every foreign invested enterprise has its own policy on wage control, and the policy cannot be affected by the CPI or any outside impacts.

Curbing the price increases proves to be a headache for the newly set up Government. The Prime Minister has released a lot of instructions in order to control the market and avoid further price increases, and people hope the drastic measures will be effective.

Source: VNE