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Employment Law

Minimum Wage Increase the Key for survival of Lao Workers

Date: 23 July 2017; Type: Legal News; Source: Vientiane Times

Pushing for an increase in the minimum wage is a top priority of the Lao Federation of Trade Unions (LFTU) this year in a move to improve living conditions for low-paid Lao workers.

Stronger voices from workers about the rising cost of living in the country have pushed the unions to press on the organisation of a tripartite meeting to agree on a wage rate increase.

The tripartite meeting will bring together representatives from the LFTU, the Ministry of Labour and Social Welfare (MLSW) and the Lao National Chamber of Commerce and Industry (LNCCI).

Speaking to Vientiane Times on Friday, a senior official from LFTU Mr Aphilath Oudomdeth said that "the LFTU has suggested that the minimum wage should increase from the present 900,000 kip to between 1.2 and 1.5 million kip a month."

"We have sent this proposal to the Ministry of Labour and Social Welfare and LNCCI for consideration. The chamber is also discussing with their members nationwide on this matter."

"Relevant officials from the MLSW called us two weeks ago to clarify how the rate of the wage increase is calculated."

Mr Aphilath said a tripartite meeting expected to be held in the next one or two months will be hosted by the MLSW.

After the tripartite meeting agrees on the exact amount of the pay rise, another proposal will be submitted to the government for consideration and approval.

The latest meeting held early this year agreed the minimum wage should be raised from the present 900,000 kip to at least 1.2 million kip a month.

The meeting was attended by representatives from the MLSW, the Ministry of Finance and Ministry of Planning and Investment, but no representatives from the LNCCI.

Over past years, the government has approved increases in minimum wages to enable Lao workers to deal with rising costs of living.

For instance, 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.

Because of low salaries compared to costs, workers ha ve asked government authorities to approve an increase in minimum wages further while regulating product prices in markets to ease hardships they suffer.

Garment factory worker Mr Vong said 900,000 kip a month is not enough to live and survive as so many items are increasingly expensive.

"I don't even have anything left at the end of the month to save at the moment. All of my money is mostly spent on food. I want to save money for other necessary things such as clothes and medicines when I'm sick," he said.

According to the Lao Federation of Trade Unions, last year Laos had about 551,200 labourers, many of whom work for various businesses and are largely unskilled, with some 70 percent working in the industrial sector.

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