Wage Discrimination Practices Followed by Japanese Corporations in Vietnam and China

March 3, 20178:17 am1219 views

Vietnamese workers working for leading Japanese corporations were offered 50 percent lesser salary than those paid to Chinese workers who work for factories in China. According to a recent survey conducted by JETRO (Japan External Trade Organization), it showed Vietnamese workers receive $4,025 on an average per year in 2016, while they work for leading Japanese corporations.

As Vietnam continues to remain a market known for cheap labour in comparison to other countries, this is one advantage point Japanese investors are cashing upon on hiring talented workers from Vietnam to meet the labour shortage in Japan.

Most Vietnam experts do not think labour costs are something that offers businesses a good competitive edge. Nguyen Dinh Cung, head of CIEM said, “Labour productivity is closely related to the average income of workers, because it is the surplus value they bring.”

Labour productivity assessments by the ILO, based on the value created in certain units of real time, i.e. the value created during one hour, one day or one year, shows that the Vietnamese labour productivity is the lowest in Asia Pacific. The nation is only ahead of Laos and Cambodia, according to ILO findings.

See: Overtime Work Laws for Vietnamese Employees Might Change Next Year

Pinning upon a point, Pham Chi Lan, a well-regarded economist, pointed out problems in vocational training, programming and forecasting. He said, many Japanese conglomerates have factories in Vietnam that only do assembling work, which creates lowest added value in the value chain, which explains why wages received by Vietnamese workers cannot be high in comparison to the Chinese.

Despite the presence of world’s leading corporations in Vietnam for many years, the workers still cannot expect higher salaries as long as they continue to do assembling and simple jobs in the value chain for foreign invested enterprises, said Vu Thanh Tu Anh from Fulbright Economics Teaching Program (FETP) to Vietnam Net.

The report released by JETRO on February 14, showed that Vietnamese managers in Japanese manufacturing enterprises earned an average of $14,629, or VND330 million in 2016.

Image credit: vietnamnews.vn

Also read: Positive Job Outlook for Vietnamese Professionals in 2017

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