Southeast Asian countries tighten wage increase in January to maintain industrial competitiveness

category:Finance
 Southeast Asian countries tighten wage increase in January to maintain industrial competitiveness


On the Vietnamese side, in major cities such as Hanoi and Ho Chi Minh, the minimum wage will be raised by 5.7% to 4.42 million Dong (about 1343.6 yuan) per month. Although Vietnams increase is more than 5% higher than the previous increase in January 2019, it is reported that the minimum wage increase is not high compared with Vietnams real GDP growth rate of about 7% in 2019.

Picture from Vietnam peoples daily

The report also pointed out that Vietnamese workers had asked to raise the national average minimum wage by about 8%, but employers asked to keep the wage increase within 3%. Vietnam takes cheap labor cost as weapon, making clothing processing and other industries prosper and develop, but until 2016, Vietnams annual wage increase rate has reached more than 10%, and its competitiveness is not as good as before. Due to the narrowing of the labor cost gap with China, the government intends to reduce the wage increase in Vietnam in recent years to about 5-7%.

Nikes factory in Vietnam from Associated Press

In Malaysia, the minimum wage in 57 major cities, such as Kuala Lumpur, will rise by 9% to 1200 ringgit per month. According to the report, when the minimum wage is adjusted in January 2019, the growth rate in some regions of Malaysia will reach 10-20%, but the local cities with low economic level will remain unchanged this time. The ruling coalition, led by Prime Minister Mahathir, won the 2018 election, promising to raise the minimum wage to 1500 ringgit a month in five years in stages.

Among Southeast Asian countries, only Indonesias minimum wage increase has increased. The minimum wage in Jakarta, Indonesia, will rise by 8.5% to idr4.28 million (2175.4 yuan) per month, an increase of more than 8% in January 2019. According to the report, Indonesias minimum wage increase in the second year is determined by combining GDP growth rate and price increase, which has remained at about 8% in recent years.

In 2018, Indonesian workers protested and asked UNIQLO to pay the wage arrears from the South China Morning Post

According to the statistics of JETRO, the minimum wage in Jakarta was about 80% of that in Beijing in 2015 and reduced to 90% in 2019. Cambodias minimum wage in Phnom Penh was 50% of that in Beijing in 2015 and reduced to 60% in 2019.

Its very important for enterprises to see whether wage hikes are accompanied by higher production efficiency, said Kobayashi of the overseas investigation department of Japans trade promotion agency. If the minimum wage in Southeast Asia rises at a level that exceeds the economic growth rate, foreign enterprises, including Japanese enterprises, are expected to have to adjust their strategies.

South Korea survives the economic winter of 2019 under the trade dispute and promotes the East Asian Alliance

On the night of December 31, 019, the temperature in Seoul, South Korea dropped below zero degrees Celsius, and the leaves were withered, which was like a cold winter landscape. In the pushin Pavilion in downtown Seoul, the bell ringing ceremony, which continued the ancient tradition, was about to be held. Thousands of South Korean people gathered at the scene, waiting for the New Year bell to ring.

For many people, South Koreas economy has not been as good as it should have been in the past 2019. It is estimated that South Koreas GDP growth is difficult to exceed 2% year-on-year, which is the same as the 1998 Asian financial crisis.

Bleak economy is more reflected in peoples annual vocabulary. At the end of December 2019, Professor news released by professors and scholars of Korean colleges and universities released the idiom birds of common life, which represents the society of South Korea in 2019. It means that there are continuous divisions inside and outside South Korea, which eventually leads to bad results. This idiom is also considered by the outside world to be a good reflection of the divided social situation in South Korea.