Many companies in Laos have not cooperated with efforts to increase the minimum wage in line with decisions made at a trilateral meeting convened by the Lao government.

The government had organised the meeting with the owners and operators of businesses in Laos, including garment factories, in response to a demand from trade unions for an increase in the minimum wage.

Senior officials of the Lao Federation of Trade Unions said during a recently interview with the Lao  media that the unions had carried out a nationwide survey to determine whether the existing minimum wage is adequate for the cost of living and found that it did not match the current circumstances.

In recent years, the government has approved increases in the minimum wage but it has been unable to prevent increases in the prices of food and consumer goods.

Senior officials from the Ministry of Labour and Social Welfare worked with the Lao Federation of Trade Unions to visit companies in Vientiane and collect information directly from them. As a result, it was found that only 10 percent  of all  companies had increased the minimum wage in line with the decisions at the trilateral meeting.

The officials said any increase in the minimum wage had a negative impact on the businesses, and employees would be in trouble if employers cut the number of workers. Many factories and companies have vacancies, but few people are interested in working for such a low pay, they said.

One official said: “In my point of view, it is necessary to have a strategic plan because this is a sort of precautionary measure that employers have to be prepared for. The use of more logical and technical methods in fixing the minimum wage will lead to benefits for all stakeholders.”

He added, “At the same time, an increase in wages is needed in view of the current situation and with the country’s economic growth.”
 Laos currently has a high cost of living and the minimum wage does not meet the basic requirements and needs of workers.

On the other hand, employers in Thailand have an increasing need for skilled workers and offer decent wages, whereas companies in Laos are still suffering from a shortage of workers.

There is also a lack of accurate data around the situation in Laos, which has given rise to issues such as informality in the recruitment process and lack of employment protection. At the same time, there is a lack of job market indicators on employment opportunities and unemployment.