Minimum wage must cover family living expenses to boost childbirth: expert

In an interview with ReadNhan, a deputy of the National Assembly and former HCMC’s Party Secretary, stressed that promoting childbirth is crucial as Vietnam’s fertility rate is at an all-time low of 1.96.

Recently, while suggesting improvements for population policies in the Population Law, you proposed that working hours be shortened for people to find partners, care for themselves and their families, and have children to increase the fertility rate. Why did you make that proposal?

Japan, South Korea, and Singapore are three countries that have maintained fertility rates below 2.1 for decades, and a common trait among them is that their daily working hours are among the longest in the world. This is also the reason cited by citizens in these countries when asked by authorities why they are reluctant to marry and have children. They no longer have time to find a partner, care for their families, and look after themselves. South Korea, whose fertility rate was 0.71 in 2023, has warned that the country will have no people left by 2750, while Japan, with a fertility rate of 1.2 last year, predicts that its population will drop to 62 by 3000.

In Vietnam, HCMC has a developed economy, the highest labor productivity and the longest average working hours nationwide. The city has also had the lowest fertility rate for decades, at 1.32 last year.

Excessive working hours contradict what workers around the world have fought for. On May 1, 1886, the American Federation of Labor and Congress in Chicago proposed eight hours of work per day, combined with eight hours of entertainment and eight hours of rest, to help workers recover their strength and have time for their families.

Currently, the average work week in Europe is only 38 hours, with people in some countries, like the Netherlands, working just 32 hours per week. Assuming a five-day work week, Dutch workers only work about 6.4 hours a day.

For these reasons, I proposed that Vietnamese people work no more than eight hours a day and 40 hours a week, with weekends off. The remaining time should be dedicated to self-care and family.

Many people delay marriage and having children not only due to long working hours but also because of low incomes that do not cover living expenses. They worry about not having enough funds to provide a good upbringing for their children. What is your view on this issue?

These concerns are well-founded. A social survey conducted in 2021 in HCMC and Khanh Hoa, Soc Trang, and Ca Mau provinces found that the primary reason couples do not have as many children as they want is a lack of financial resources. Similar surveys in Japan, South Korea, and Singapore show that couples’ incomes are insufficient to support themselves and provide for two children until they are 18, making them hesitant to have more offspring. Low income is a major reason why adults choose not to marry or to have no children or only one when they do start families.

Therefore, at an international conference on Aug. 28, I proposed 11 state policies to encourage families to have children and young people to marry earlier. The best solution is to ensure a living wage for a family of four with two working adults, meaning their combined income should be sufficient to support themselves and two dependents. When wages are structured according to this criterion, workers will feel less pressure to work overtime for extra income, giving them more time for themselves, their families, and their children.

In addition to addressing income and working hours, I suggest that the government implement other policies, such as developing a competitive housing market to ensure that workers can afford to rent or buy homes, improving working conditions for women with young children, providing universal access to preschool education for children as young as three months old, and allowing families to decide the timing and number of children to have.

When these conditions are met, Vietnamese people, whose culture values family, will be more inclined to marry and have children.

You commented that higher income and shorter working hours will encourage people to have children. However, many European countries have high GDP per capita and a lot of time off work, yet their fertility rates remain below 2, with Switzerland at about 1.56 and Finland at 1.32 in 2023. What does this indicate?

A high GDP per capita does not mean that all citizens are wealthy. GDP is attributed to three groups: workers’ wages, business owners’ profits, and the state’s taxes and fees.

High GDP per capita only indicates that the average value added by an individual in a year is high. It does not reveal what percentage of that amount is attributed to workers in the form of wages and bonuses, how much is transferred to the state as taxes and fees, or what percentage of that amount is profits that go into the pockets of business owners. Therefore, GDP does not accurately reflect whether workers earn high or low incomes.

According to anti-poverty group Oxfam’s annual inequality report published in 2023, the wealthiest 1% of the global population experienced a wealth increase of more than 1.6 times the total wealth growth of the remaining 99%. The wealth of the top 1% rose by $26 trillion, while the wealth of the remaining 99% increased by only $16 trillion. This indicates that as GDP rises, the share attributed to workers does not grow proportionately; instead, profits primarily benefit business owners.

Despite low fertility rates persisting for decades, leaders in high-income countries do not view this as a significant issue and continue to prioritize GDP growth. This led some young people to focus less on the long-term existence of their country and more on their personal lives, particularly their income, career advancement, travel, and socializing.

You consistently advocated for higher childbirth during your time as deputy prime minister, chairman of the Vietnam Fatherland Front, and HCMC’s party secretary. Why are you so focused on this issue?

Back in 2007, when I became deputy prime minister, I was put in charge of the Ministry of Health and matters regarding the population. At that time, the ministry was developing the population and reproductive health strategy for the 2011-2020 period. When the ministry submitted its draft strategy, I noticed it aimed to reduce the fertility rate from 2.0 in 2010 to 1.8 by 2020. I questioned why it was targeting a lower fertility rate and what level of reduction would be considered reasonable, but I did not receive a satisfactory answer. So, I had to research the matter myself.

I realized that many countries, whose fertility rates had been low at around 1.3-1.7 for many years, were trying to raise it to 1.6-1.8, while Vietnam, with a rate of 2, was aiming to reduce it. I then came to understand what the replacement fertility rate means—that is, a couple having two children so that when they retire or pass away, their two children will replace them, allowing society to develop stably and sustainably. However, since some children may pass away due to illness or accidents before reaching 18 years old, the replacement fertility rate should be 2.1.

Therefore, setting the target fertility rate of 1.8 would be detrimental to a country. In high-income countries, once the fertility rate drops below 1.7, it becomes nearly impossible to raise it back to 2.1, even with tens of billions of dollars spent annually on encouraging childbirth.

When I served as deputy prime minister (from 2011 to 2013) and as chairman of the Vietnam Fatherland Front (from 2013 to 2017), I proposed to the Politburo and the government that the fertility rate target for the 2011-2020 Population and Reproductive Health Strategy should be changed to 2.1. This marked the first time since 1960 that Vietnam’s population policy set the goal of maintaining the replacement fertility rate at 2.1.

In mid-2017, I took on the role of HCMC’s party secretary. That year, the city’s fertility rate was only 1.35, far too low compared to the target of 2.1. At a session of the People’s Council in October 2017, the city authority presented a proposal to allocate funds for sterilization efforts. I suggested removing this provision, as HCMC needed to encourage childbirth, not sterilization.

From this, we see that when we lack sufficient information and fail to stay updated on what is happening globally, sticking to old practices can lead to decisions that contradict the best interests of a city and a country.

In 2019, HCMC conducted a sociological survey asking women how many children they desired. The average response was 2.08 children, very close to the replacement fertility rate of 2.1. However, the actual fertility rate was only 1.3-1.4, indicating that women in the city want to have children, but their resources and conditions do not allow it. Therefore, it is essential to turn their desires and the consequences of a low fertility rate into pressure for leaders at all levels to develop more suitable policies. This means that while having children is a personal choice for women, ensuring the conditions to raise and educate those children properly should be a responsibility shared by society as a whole.

In recent years, the city has piloted after-hours childcare and initiated the construction of social housing for workers. These are necessary steps, but they are not enough. Raising the fertility rate is urgent and requires a comprehensive and robust national program. Only then can we achieve the goal of maintaining the replacement fertility rate.

What should Vietnam do to make its pro-natal policies effective?

Some countries have introduced pro-natal policies but failed, serving as lessons for Vietnam. These countries only implemented pro-natal policies after maintaining a low birth rate for several decades, by which point it was too late.

The financial support provided by some governments to help families raise two children has been limited. Between 2018 and 2020, Japan spent US$20 billion annually to encourage marriage and childbirth, while South Korea spent $12.5 billion, meaning each child received a daily subsidy of $3-5. This amount is too small compared to the cost of raising and educating a child. Japan’s new government is planning to increase the budget to $25 billion, translating to $1 more per day for each child. However, even this is unlikely to result in a higher birth rate.

Vietnam’s fertility rate fell to 1.96 for the first time in 2023. We should not wait 20 years to implement pro-natal solutions, we must act now while the birth rate has just started to drop below 2. The sooner we act, the lower the costs and the more effective policies will be.

We can see that for families to raise two children, state subsidy alone is not a long-term solution. The best approach is to change wage policies. The current minimum wage, which is only enough to provide for one working individual, needs to be adjusted to support the worker and one dependent. This way, a family with two working adults would have enough income to support themselves and their two children.

Our current policies aim to maintain the replacement fertility rate at 2.1. To achieve this goal, there needs to be a shift in the country’s governance philosophy. We should not focus on consistently strong GDP growth but instead prioritize the happiness of the people and the enduring survival of the nation.

Comments are closed.