Rising Labor Costs to Make Vietnam Less Attractive to Investors: Survey

Vietnam’s rising labor costs and shortages of skilled workers will make the country less attractive to foreign investors, according to a labor survey released by the Ministry of Labor, War Invalids and Social Affairs (MoLISA) recently.

 

The survey showed a 6.5% hike in Vietnam workers’ average monthly salaries in 2009, specifying the average monthly salary of workers at state-owned enterprises rose 1.2% to VND3.2 million, wages of workers at foreign-invested firms rose 7.8% to VND2.6 million and salaries of workers at private ones rose 5% to VND2.35 million.

 

“Great concerns in the surge of labor costs are increasing among Japanese manufacturing companies,” said a Japan Bank for International Cooperation’s Survey 2009, adding that many foreign enterprises have also shared the same view with it.

 

Japanese companies noted that plans by Vietnam’s government to raise minimum salaries had not come at a good time as the global economic slowdown has increased production costs and stunted global demand and exports.

 

The MoLISA survey also stated that Vietnam’s ratio of skilled workers remained short, with only 37% of the country’s 48.3 million labor force having been trained.

 

Currently, 400,000 enterprises are operating in Vietnam. (VIR)