The pay rise is expected to take place from May 1 this year when Laos celebrates International Labour Day and should bring pride and pleasure to all Lao workers.
The Ministry of Labour and Social Welfare has been entrusted to play an active role in collaborating with other relevant sectors to implement the government’s notice.
Lao Federation of Trade Unions (LFTU)’s Labour Protection Department Director General, Mr Ounkham Ounyaseng told Vientiane Times on Monday the wage increase was vital to improving workers’ livelihoods.
“The pay rise should minimise workers’ hardships amid the rising cost of living in Laos, with product prices rising every month,” he said.
“900,000 kip a month is not enough to live on, and many items are increasingly expensive. Employers should sympathise with workers and help them to improve their living standards as labourers are the ones enabling employers to make a profit.”
Mr Ounkham explained that some employers didn’t understand the term ‘minimum wage’ which should exclude overtime payments and other allowances.
While some entrepreneurs argued the pay rise would definitely increase production costs of Lao goods for export, Mr Ounkham responded that if workers get more wages, employers can give more responsibility to workers and ensure the quality of the products produced.
Previously many factories and companies in Laos had jobs on offer but few people were interested in working for such low pay.
The low salaries offered by employers in Laos drive many people across the border to seek work in Thailand where the wages are higher.
“If workers get sufficient payment from employers, they will be happy to dedicate their energy and efforts to working for the companies,” Mr Ounkham said.
Over recent years, the increased cost of living has significantly contributed to driving the country’s burgeoning trade deficit.
Minister of Industry and Commerce, Mrs Khemmani Pholsena told a National Assembly session last year the prices of food staples in Laos are 10-20 percent higher than in Thailand and Vietnam.
In recent years, the government has approved increases in the minimum wage to enable workers to cope with the rising cost of living. In 2012 the government raised the minimum wage from 348,000 kip to 626,000 kip a month, and in 2015 ordered a further hike to 900,000 kip a month.
According to the Lao Federation of Trade Unions, last year Laos had about 551,200 labourers, many of whom are largely unskilled, with some 70 percent working in the industrial sector.