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Wage rate in relation to social responsibility of IP enterprises

Wage rate in relation to social responsibility of IP enterprises


According to the survey, 38% of employees in foreign invested companies have the labor contract. 6.5% of the labor has to work more than 10 hours per day and 7 days per week; a number of enterprises demand employees to work 500 – 600 hours per year, as threefold as required. The popular wage rate of labor in FDI sector and private sector ranges from 600,000 to 1.2 million Vietnam dongs per month, in which the number of employees receiving less than 1 million Vietnam dongs per month takes an account of 50% of the total labor force. The majority of enterprises design the payroll which includes 30 to 40 scales; distance between scales is 10,000 Vietnam dongs.
All of the employee’s expenditures depend on that wage, which is approximately 50 US dollars per month; the majority of employees spend half of the wage to assist their family in the countryside. As the price is escalating, especial the consumption price (by 8 to 9%), the living standard of employees is becoming poorer, so as their health condition. According to the survey, 41% of the employees could not send any money back home; entertainment expenditure (cinema, amusement center) is too far luxury for 80 to 90% of the employees. Some enterprises maintained the regular increase in worker’s salary (such as Pung Kook, Tan Thuan EPZ); however, that increase fails to compensate the price inflation. Most of workers are descended from poor family in rural areas. They work in the urban areas with the hope to assist their family; however, they could not afford themselves, let alone helping the family. Nevertheless, they have to stint themselves in everything to have such a small amount of money to send home.
Such a low salary can not afford the demand for generalization of the employees, even more, the low public utility condition, increasing shifts and extra hours are bleeding the workers white. A healthcare center in Thu Duc District, Ho Chi Minh City revealed that they have received hundreds of faint workers per day as a result of health breakdown and malnutrition. As a result, the productivity is lessened, employees are less motivated to work, that in turn affect the enterprises’ manufacturing.
An adequate wage rate not only encourage employees to increase their productivity and improve the product quality but also help to balance the benefit of enterprises, cut down on production cost and improve the manufacturing efficiency of enterprises.
Corporate Social Responsibility (CSR) includes enterprises’ responsibility to warrantee an adequate wage rate for employees, provide a standard working condition as well as health care services for employees. Recently, the 6th Asia Forum under the theme “Corporate Social Responsibility – a driving force for improvement and development” was held in 2 days from 27th to 28th September 2007 in Ho Chi Minh City. The Forum emphasized a renovation program as well as an action plan related to responsibilities of enterprises in meeting the social demands and responsibilities. The program aims at 5 targets: environment protection measures, education development assistance, hunger and poverty alleviation, comfortable working condition, and healthcare for employees. Big foreign investors in Vietnam such as Intel, Microsoft, Unilever, Coca Cola, Holcum Vietnam, have successfully performed the program. Recently, a number of domestic enterprises, especially in textile and garment, started to apply the program. According to 24 enterprises applying the program, their turnover, productivity and export value have increased thanks to the CSR. By that, performing CSR does not merely contribute to the society, but also help enterprises to reduce production cost, increase turnover, add value to the trademark and extend potential markets.

However, there still exist such enterprises, even foreign enterprises that try to search for profits, making light of CSR, employer-employee relationship, legal rights, and healthcare condition, physical and mental health of employees. That fact, in turn, places difficulties to the manufacturing activities of enterprises and erode the relationship between employers and employees. It is high time both domestic and foreign enterprises regard CSR a strategic target apart from their manufacturing activities.


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Lisence No.: 69/GP-TTĐT dated 30th June, 2016 issued by Ministry of Information and Communications of The Socialist Republic of Vietnam
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