Thousands of Vietnamese workers have been striking peacefully outside of the Pou Yuen shoe factory in Ho Chi Minh City. Interestingly, unlike previous protests, this strike is not directed at the poor policies of their employer, but is instead focused on a controversial new government pension law.
The Pou Yuen factory is a subsidiary of the Taiwanese-owned Pou Chen Corporation. The factory employs over 80,000 Vietnamese workers and makes shoes for such global brands as Nike and Adidas.
Protests are a relatively unusual occurrence in Vietnam, the government usually being quick to act to prevent anything that may hurt the business environment and make foreign investors uncomfortable. The current protest has received extremely limited news coverage from local media. In recent years, with its young and low-wage workforce, Vietnam has become a key global manufacturing hub. The majority of the country’s population is under the age of 40, and many are highly skilled, making Vietnam a very attractive destination for foreign investors.
The most recent large protest to occur in Vietnam occurred in May of last year and was the result of anti-Chinese sentiment arising from the provocative move by the Chinese government in placing an oilrig in disputed waters off of the Vietnamese coast. During these protests, a number of Chinese and Taiwanese factories were burned down. You can read more about those protests here.
Controversial pension law
The new pension law that the government has instituted seeks to change the current pensions system, where workers pay a monthly sum to a central fund. If the workers became unemployed, they could receive a lump sum payment, which equals the premiums paid. However, in the new version of the law, workers will only be able to receive these payouts after they retire (the retirement age is 60 for men and 55 for women), and the amount will be distributed on a monthly basis rather than given as a lump sum. Additionally, only a small amount of workers will be eligible for unemployment payouts.
Vietnam’s government has argued that the new law was formulated so as to meet the “long-run social security objectives for the sake of laborers.” It was also intended to encourage workers to save more for their retirement. However, the striking workers say they need the lump sum unemployment payouts in order to cover daily expenses while they search for a new job. Despite recent increases in wages, Vietnam still has one of the lowest wage rates in the region.
An additional worry that has been voiced quietly by some workers, expresses their lack of trust that the money they have paid into the fund will still be there for their retirement. Thus, many feel safer to receive the money as soon as possible. Criticism of the Vietnamese government and controversial opinions can be dangerous, and could bring undue attention from the state security apparatus. In its defense, the government has been struggling over recent years to crack down on corruption and increase transparency in its operations, but there is still much work to be done.
As of the end of last week, the striking workers were still organized peacefully outside of the Pou Yuen factory; however, they also continued to remain under the watchful gaze of government security forces.
In response to the calls from the protesting workers, Vietnam’s Prime Minister, Nguyen Tan Dung, said the government will consider amending the pension law. There is the possibility that workers will be given the option to either receive a lump sum payment when they leave their company or receive the payment after they retire. In the meantime, government officials have urged the protesters to end their strike and return to work.