Wildcat strikes pay off in Vietnam
By Aaron Glantz and Ngoc
Nguyen
HO CHI MINH CITY - More than a
dozen strikes by more than 40,000 workers in Ho
Chi Minh City's export processing zones have
forced the Vietnamese government to raise the
country's minimum wage by nearly 40%.
The
hikes - up to US$55 a month in Vietnam's two
biggest cities, $50 in mid-sized cities and $45 in
the rest of the country - show increased
frustration among workers, who are only allowed to
affiliate with a single, government-run trade
union.
Two dozen workers at Ho Chi Minh
City's Danu Vina factory enjoy beers and a beef
hot pot after a hard day's work. But even with the
wage
increase, they'll still earn less than $2 a day
making stuffed animals which are sold in the US by
Hallmark, Disney and Starbucks.
"In
everyday life all things go up in price," says
Minh, who has packaged toys for two years.
''Everything that you use, food and drink become
more expensive and we find that we're struggling
to live. We're protesting to have a better quality
of life."
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% of its value against
the US dollar. At the same time, inflation totaled
28%.
The strikes, running for more than
month, worsened after an 18,000-strong walk-out by
workers at Freetrend, a Taiwanese company whose
factory makes shoes for brands like Nike and
Adidas.
Huong, 23, has worked for
Freetrend for five years. She makes more than the
minimum wage but said that was barely enough to
pay for her boardinghouse bed near the factory.
She said low wages were not the only thing making
workers unhappy. ''The work is very tiring," she
says. "The food the company serves us is not
enough. It's not cooked well and does not taste
good so the workers do not have enough energy to
work."
Many of the strikes have occurred
in foreign companies, with workers citing
communication problems with non-Vietnamese
managers, among other things. Huong is critical of
her bosses. "We're always on guard at work," she
says. "The officials yell and swear at us and
mistreat workers."
While labor action is
not new in Vietnam, workers have become more
militant in recent years, according to Long
Nguyen, who manages security guards in Ho Chi Minh
City's export processing zones.
"There are
people who sit and people who stand," he says,
"And those who just mill around without any
organization. At other sites, people sit down in
an organized fashion and they select a
representative to speak with management. There are
a number of protesters who are aggressive. They
throw things and they kick and destroy property."
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.
On the other hand, the government
will have to keep in mind the competitive nature
of foreign investment. Taiwanese companies
affected by the strikes and the minimum wage hikes
have threatened to move elsewhere, which would be
a significant blow for Vietnam given that
Taiwanese manufacturers accounted for more than
1,408 direct investment projects in Vietnam worth
$7.93 billion by the end of December 2005,
according to government statistics.
"China
has low wages, Vietnam has to keep wages at a
similar level in order to be competitive," says
Carey Zesiger, who monitors labor conditions in
Vietnam's export factories for the consulting firm
Global Standards.
But the minimum wage in
China is $63 a month, 13% higher than Vietnam's
new level. Vietnam's government, Zesiger says, was
"trying to balance the interests of their citizens
who work in the factories and the standard of
living of the workers against that of foreign
investors who they need to attract to create jobs
and develop the country."
On paper, at
least, Vietnam has some of the strongest labor
laws in the world. Under the communist system,
workers in every factory are required be
represented by the official government union
within a few months of opening. But observers note
that since the influx of private companies started
a few years ago, enforcement of the policy has
been lax. This, they said, had led to worker
frustration and wildcat strikes.
"When
foreign investors enter Vietnam, they must follow
the country's labor rules," says security manager
Long Nguyen. "If they don't, the Vietnamese
government has the responsibility to enforce the
law or expel the company. The government has to
protect the worker. The unions that represent
workers in factories of foreign and joint-stock
companies are weak. They don't have the strength
to stand up to the management."
But this
latest wave of strikes has led to one victory. The
new minimum wage - the quickest labor settlement
anyone can remember - will take effect from the
beginning of February.
