• People Talk and My Ear Bleeds


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    Thursday, January 19, 2006

    Labor Strikes in Vietnam 3

    Thanks to the anonymous reader who sent me this link.

    The IPS News Agency reports that
    Before this recent wave of strikes, the Vietnamese government had not raised the minimum wage in six years. During that time, the Dong had lost almost 15 percent of its value against the U.S. dollar. At the same time, inflation totalled 28 percent.

    The strikes, running for more than month now, worsened after an 18,000-strong walk-out by workers at Freetrend, a Taiwanese company whose factory makes shoes for brands like Nike and Addidas.

    ...Faced with this new growing grassroots pressure, the government finds itself in a tough spot and the Communist Party has chosen not to react to wildcat strikes showing the effect that the newly opened economy has on getting authorities to respond to the needs of civil society.
    That's the key. With almost 16000 VND to a dollar now (it was 15000 VND to a dollar just one year ago), people's wages must increase to keep up with inflation. I expect that, since the minimum wage in Vietnam is still less than China ($55 vs $63), workers will continue to pressure the government. If Vietnam wants to enter the WTO, it needs to not only conclude the talks it's currently having with the United States, but show that progress is being made. Increased worker strikes do not highlight the best of the Vietnamese economy, nor a reason why the USA should permanently normalize its trading relations with Vietnam--a requirement for Vietnam to enter the WTO.

    [NOTA BENE]: In my last post I said the highest pay increase was to 810,000 VND. It is, in fact, 870,000 VND.

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