Wages leave many factory workers in poverty

21:53' 28/04/2008 (GMT+7)
VietNamNet Bridge – The Government is being urged to adjust the poverty line to support many workers who are struggling to make ends meet in industrial zones along the Cuu Long (Mekong) Delta.

Workers process seafood for export at Tra Noc Industrial Zone in Can Tho Province. A new poverty-line standard should be issued to help these workers have a better living standard.
Having worked for one and a half years at the Ty Xuan Company producing leather shoes in Hoa Phu Industrial Zone in Vinh Long Province, Nguyen Thi Phuc has recently had her wages boosted from VND710,000 (US$44) to VND860,000 ($53) per month. But even with this raise, Phuc says supporting herself and her young family is a daily struggle.

Every month, she has to hand over VND300,000 ($18) for her boarding house and VND300,000 for her child to attend a private kindergarten. "The remaining VND260,000 ($16) doesn’t cover food for the month, and inflation has meant prices have gone up a lot recently."

To make enough money to survive, Phuc has to work overtime at VND6,000 ($0.37) per hour. "Most of the time we just eat rice and vegetables. I can only afford some meat or fish once a week," she said.

Phuc’s story is a familiar one among workers in the industrial zones, areas known as the cornerstones to the nation’s economic development.

According to Nguyen Thanh De, a worker in Tra Noc 1 Industrial Zone in Can Tho Province, his monthly income of VND1.4mil ($87) only just covers basic essentials. There’s no way he can save anything.

President of the Trade Union of industrial zones in Vinh Long Province Nguyen Thanh Nhan agrees. "A lot of male workers told me that because they can’t save money, they dare not plan to get married."

Bread and board

Part of the problem is the cost of renting accommodation. In Hoa Phu Industrial Zone, Vinh Long Province, no companies provide their workers with accommodation and about 60% of workers IZ have to live in boarding houses. Prices range from VND280,000 to VND360,000 ($16-$22) per room, or VND60,000 to VND80,000 (up to $5) per bed. This is a considerable burden on their wages.

In 2006, the Trade Union in Can Tho City put forward a project to build 1,000 apartments for low-income workers in the city. Under the plan, workers would pay rent monthly, and after 10 years could be owner of the apartment. But in March 2008, the city’s People’s Committee issued a document stating that due to a limited budget, the proposal had to be scrapped.

Social services

Underlying the problems faced by factory workers is the fact that their incomes do not fall below the poverty line, rendering them unable to claim social services.

Workers’ standard of living should be taken into account based on practical conditions, vice director of Rach Mieu Bridge Company in Ben Tre Province Ha Ngoc Nam says. "Businesses should not be responsible for raising wages if they are adhering to Government policies on the minimum wage. There should be a poverty line applied to workers."

Vice President of the Trade Union office in Ben Tre Province, Tran Trung Hao, agrees. "Workers in IZs have a hard life. According to the current criteria, workers are not classed as living below the poverty line. So in the past ten years, the Fund for the Poor has never helped workers improve their temporary housing. Despite rising inflation, the average monthly income for workers in IZs is only VND1.3mil to VND1.4mil (up to $87)."

The importance of calculating the poverty line according to practical conditions is vital to helping those most in need. The fundamental reason for this is in rural areas, farmers may be poor but they still have a house and the cost of living expenses is a lot cheaper. In contrast, workers in urban areas have to pay for their own accommodation and the prices of daily essentials are substantially higher.

According to statistics provided by the Department of Economic and Social Policies from the Ministry of Trade Union in Can Tho Province, 97.85% of workers in Can Tho Industrial Zone said workers should be provided with accommodation. Nearly 90% said firms needed to do this if they wanted to keep hold of their employees for the long term.