Worries about price increases when wages increase

If approved by the National Assembly, from July 1, 2024, the basic salary of civil servants and public employees will increase by 30%, and pensions will increase by 15%. For the business sector, the regional minimum wage according to the Labor Code will also increase by 6% compared to 2023. This is the highest increase in basic salary ever, demonstrating the concern of the Party and State to ensure the living standards of workers.

My friend is an official at an agency under the People's Committee of Hai Duong province, her monthly salary is currently around 7 million VND. When she learned that the basic salary would increase from July 1, she estimated that her income would reach more than 9 million VND. This income, along with her husband's monthly salary of more than 10 million VND, would be enough for the couple to cover their living expenses. Although she calculated that way, my friend was also concerned that the increase in the basic salary would cause the prices of many goods to increase, especially essential goods for daily life.

My friend's concern is not unfounded. In fact, in recent years, every time the State adjusted to increase the basic salary or increase the regional minimum wage, the prices of many goods increased before or immediately after the decision to increase the salary. Even though the salary increased slightly, the prices of goods increased even more. Specifically, the most recent basic salary increase on July 1, 2023, from 1,490,000 VND/month to 1.8 million VND/month, immediately after that, many goods such as electricity, water, gas, construction materials, food, catering services, etc. all increased from 1 - 7.8% compared to the time before July 1, 2023 (data from the General Statistics Office). According to the report of the Ministry of Finance, on average in the first 5 months of 2024, the CPI nationwide increased by 4.03% compared to the same period in 2023. In this increase, 10/11 groups of goods and services had an increased index, only 1 group of goods index decreased, which was telecommunications.

In recent days, at many traditional markets, supermarkets, and convenience stores in Hai Duong province, many items such as livestock meat, poultry, aquatic products, seafood, vegetables, etc. have been increased in price by small traders and store chain owners.

Another problem is that salaried workers have not yet had time to celebrate before they are already worried about having to pay personal income tax. Because the current family deduction in calculating income tax is outdated. The family deduction in the past 10 years has remained the same while the cost of living and prices of goods have continuously increased. The backwardness of the personal income tax calculation method has been reflected for many years but has not been adjusted.

It is expected that more than 35,000 civil servants and public employees in the province will receive a salary increase. Of these, more than 1,700 civil servants in administrative agencies and organizations and more than 33,300 officials in public service units and mass organizations assigned by the Party and the State (excluding the armed forces and vertical units). The increase in basic salary is aimed at ensuring the lives of civil servants, public employees and workers. However, if consumer prices increase beyond control, not only the number of people receiving salaries will be affected, but also all people.

In order for the wage increase to truly contribute to improving living standards and encouraging workers to work enthusiastically, it is necessary for the authorities to effectively implement the Prime Minister's Official Dispatch No. 61/CD-TTg dated June 22 on strengthening price management and control measures. Regularly monitor the price movements of goods, the balance of supply and demand of essential goods; strengthen coordination in price management, maintain the market of goods at a stable level, and prevent hoarding and unreasonable price speculation in the area. Step up inspection and control of market prices; handle businesses and traders who unreasonably increase prices of goods...

When commodity prices are well controlled, the shortcomings in family deductions are resolved, and the taxable income threshold for individuals is raised, then the joy of workers when their salaries are increased will be truly complete.