Workers at many foreign- invested companies are struggling as their wages are swallowed up by inflation. Is industrial action the only option left open to workers? Ninh Kieu finds out.

Many workers at foreign-invested factories are struggling to make ends meet

Coming home from the market Do Thi Cuc, a worker of Japan-backed Sumitomo Bakelite factory based in Hanoi’s Thang Long Industrial Zone, carried a bundle of mustard green, two tomatoes and three soya curd piles.

That was all Cuc could prepare for a dinner for two people including her roommate.

Cuc had planned to enjoy her first Sunday of March, a day she did not have to work, but it later turned out to be a bad day for her. In the morning of the day, Cuc’s landlord announced the housing rental would rise to VND400,000 (USD19.3) from VND300,000 (USD14.4) per month and the electricity price to VND3,000 (6.9 cents) per kWh from the previous VND2,500.

The announcement was a hammer blow to Cuc and her roommates’ finances, forcing them to further cut “unnecessary expenses”. The “unnecessary expenses” that Cuc described are leisure activities, going out with friends, buying new clothes, cosmetics and even cutting food expenses.

For Cuc and her roommate, Do Thi Anh Tuyet, a dinner with vegetable, soya curd and egg is a regular thing.

“We do not have much money for better meals. Our salary is too low and we have to save money for a future life,” said Cuc.

The 21-year-old worker said she felt life had become tougher and tougher since last September when the consumer price index (CPI) started exploding.

Cuc earns about VND2 million (USD96.6) per month, equating to USD3.7 for each eight-hour working day.

“We have been trying to arrange our lives with low salaries over the past months, every unnecessary expense has been cut but we always run out of money,” said Tuyet, a worker at Japan’s Kyoda Company.

Although Tuyet earns VND2.5 million (USD120.7) each month, higher than Cuc’s salary, two weeks ago she decided to send her motorbike back to her mother and went to work on Cuc’s bicycle.

“Fuel prices jumped, I can’t afford it,” said Tuyet.

Salaries left behind by price hikes

Cuc and Tuyet are just two of thousands of workers at foreign-invested companies in Vietnam’s industrial zones struggling with skyrocketing inflation.

The General Statistics Office reported the CPI in the first two months this year rose 3.87 percent, or 12.24 percent year-on-year. Analysts forecast the CPI will continue rising in March after the government raised fuel and electricity prices since late last month and early this month, effectively.

As a result, poor people and low-cost workers at industrial parks will be the most vulnerable to inflation.

At the Thang Long Industrial Zone, workers complain that their low monthly salaries cannot meet their regular expenses. The average salary of a worker in the park is from VND1.6 million (USD77.2) to VND2 million (USD96.6). This includes transport, housing rental, lunch and diligent benefits.

Most workers come from northern provinces.

Tuyet said about two-thirds of her salary was spent on food and rent. “If prices continue to rise, I will go back home,” Tuyet added.

The situation is similar to workers working in industrial parks in southern provinces like Binh Duong, Dong Nai and Ho Chi Minh City, home to many foreign-invested companies.

“I feel life is worse and worse here. With VND2 million per month, it is not enough for me to live on,” said Nguyen Thu Ha, a worker at Japan’s Wonderful Saigon Electrics located in Vietnam-Singapore Industrial Park in Binh Duong province.

To reduce expense, Ha and her roommate called two other friends to live in a 15 square metre boarding-house to split costs.

After two months working in the company, Ha said she was thinking about returning to her hometown in northern Phu Tho province to find another job.

“I thought a worker in a foreign-invested company could earn much money, but it is not so easy. I had to ask my family for money to spend during Tet,” she said.

According to a General Confederation of Labour report released late last year, the monthly average salary at foreign-invested companies was VND1.82 million (USD87.9), equal to VND6,900 (USD0.3) per hour.

Meanwhile, the monthly average salaries at state-owned companies and domestic private companies are VND2.25 million (USD108.6) and VND1.98 million (USD95.6), respectively.

“Workers at foreign-invested companies are paid less than workers at state-owned and domestic private companies,” said the report.

And while the economic growth in the past 10 years recorded a 3.6-fold increase or around 6.8-8.5 percent per year, the CPI doubled and the spending on essentials tripled, the minimum salaries for labourers at foreign-invested companies rose only 2.45 times, according to the report.

Strike action starting to rise

For some workers strikes are becoming the only option.

Last week, 3,000 workers at motorbike manufacturing Yamaha Company in Hanoi striked for higher wage, forcing the company to temporarily shut down production. Yamaha’s workers asked for a 12 per cent salary increase.

During January and February, workers at Malaysia’s White Feathers Company, United Kingdom’s Theodore Alexander Company, Japan’s Panasonic Home Appliances Vietnam and Philippine’s Yasufuku Vietnam also striked for higher wages.

“If we did not strike, I think the company would never increase wages,” said a worker at Yasufuku Vietnam.

Before going on strike, she received more than VND1.6 million (USD77.2) per month. And now, her monthly wage is VND2 million (USD96.6).

According to the Ho Chi Minh City Confederation of Labour, there were 21 strikes at industrial parks in the city during the first two months of 2011. This number is equivalent to one-third of strikes in 2010.

Tens of strikes occurred in Binh Duong province at the same time.

Le Xuan Thanh, deputy director of the Ministry of Labour, Invalids and Social Affairs’ Department of Labour-Salary, said the number of strikes had risen this year.

“If prices keep rising, we will see more and more strikes as workers feel their living standards are reducing,” Thanh said.

He said strikes only occurred at foreign-enterprises which paid workers low wages.

“Most of those companies come from South Korea, Japan, mainland China and Taiwan and operating in the textile, electric assembling and wood processing sectors. For companies offering higher wage and good benefit for workers, they have never faced strikes,” he said.

A worker at Hanoi’s Thang Long Industrial Zone said: “Strike is the only weapon for us to protect our interests.”

“We are now asking for an increase from VND100,000 (USD5) to VND300,000 (USD15) per month. This is not an unreasonable requirement. We could strike if our requirement is not met,” the worker said.