Average Monthly Income as a Base for Compulsory Social Insurance Payments Divided by Region in 2017

3.3.3.1. Average monthly income of workers11

In 2017, the average monthly income as a basis for paying compulsory social insurance of employees in the non-state-owned enterprise sector: 4,254 thousand VND/month, much lower than the average monthly income as a basis for paying social insurance in Vietnam. FDI sector: 5,356 thousand VND/month. Regarding the income growth rate, the highest rate still belongs to foreign-invested organizations (up 16.5% compared to 2016), followed by the non-state and state-owned enterprise sectors (12.8% respectively). and 12.7%).

Figure 3.3: Average monthly income as a basis for paying compulsory social insurance divided by region in 2017

Unit: thousand people

Source: ILSSA calculated from Vietnam Social Insurance data in 2016 and 2017

Compared to the average income (quarter 2/2017), the income level as a basis for paying social insurance in the state-owned enterprise sector is only 66%, in non-state enterprises is 72% and in enterprises with foreign investment capital, organizations from abroad is equal to 91% of the employee's monthly salary 12 .

With the average monthly income of workers in non-state enterprises being not high, this has also affected workers' participation in social insurance. The results of in-depth interviews show:

11 Trend report on social insurance and unemployment insurance for the period 2008-2017 and forecast for the period 2018-2020 of the Institute of Labor Sciences and Social Affairs

12 According to the Labor and Employment Survey data of the second quarter of 2017, the monthly payroll of temporary labor in the State-owned enterprise sector is 6.84 million VND/month, that of non-state-owned enterprises is 5.89 million VND/month and that of non-state enterprises is 5.89 million VND/month. , foreign organizations are 5.89 million VND/month

" You said my salary is 4 million so low, and I have to deduct it to pay social insurance, so I don't want to participate. I understand that I will receive benefits in the future, but because my salary is too low, I have to pay for food. Month is not enough

PVS. Female worker, 27 years old, non-state enterprise.

“ If you have a high income, then there is no problem in deducting social insurance, but we here have a low income and if our monthly spending money is not enough, we don't want to participate.

PVS. Male worker, 30 years old, non-state enterprise.

- When learning about the gender characteristics of workers participating in social insurance at non-state enterprises. The data results in Table 3.3 show that: there is an imbalance in the gender of employees participating in social insurance at non-state enterprises. Specifically: men participating in social insurance in non-state enterprises are 432,689 people, accounting for 70.8%, higher than women participating in social insurance, which is 389,841 people, accounting for 64.7%.

The data results reflect the fact that gender equality issues need to be given more importance in non-state enterprises because the rate of men participating in social insurance is higher than the rate of women participating. social insurance.

This is completely different from enterprises with foreign investment (FDI) where the issue of prioritizing female workers is always given importance. Specifically: in enterprises with foreign investment (FDI): the proportion of women participating in social insurance in enterprises with foreign investment (FDI) is 163,607 people, accounting for 27.1%; higher than the male rate: 104,817, accounting for 17.2%. Results of gender analysis with social insurance participation show that female employees in foreign invested enterprises (FDI) receive more attention from businesses compared to other types of businesses. other businesses, is considered a "bright spot in foreign investment (FDI) enterprises and is also completely consistent with policies prioritizing gender equality in labor of countries around the world." .

The proportion of female workers in non-state-owned enterprises participating in social insurance is higher than the proportion of female workers in foreign-invested enterprises (FDI) and much higher than Proportion of female employees in state-owned enterprises. This cannot be explained by the fact that non-state enterprises do a better job of prioritizing female workers to participate in social insurance than other enterprises.

with foreign investment (FDI) and state-owned enterprises, the nature of which is that the number of women in non-state-owned enterprises is much higher than the number of women in foreign-invested enterprises and state-owned enterprises. .

Table 3.3. Gender of social insurance participants in non-state enterprises

Type of business

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- When analyzing gender differences with time participating in social insurance from less than 12 months in 03 types of businesses. The data results in table 3.4 show:

Among the group of workers participating in compulsory social insurance for less than 12 months, the rate of men is nearly twice as high as that of women in the state-owned enterprise sector (64.6% and 35.4%); While in the FDI sector, the difference between men and women is 17% (men: 41.7% and women: 58.3%); In the non-state enterprise sector, this rate is not significantly different (51.3% and 48.7%). The data results once again confirm that foreign invested enterprises (FDI) and non-state enterprises are interested in participating in social insurance for female workers.

Table 3.4. Time to participate in social insurance of employees in non-state enterprises

Type of business

Source: Project data calculated from the electronic database of social insurance management of Vietnam Social Insurance

Data results in table 3.5 show that: gender factors are clearly evident in the group of workers with time participating in compulsory social insurance, this difference between men and women is 17% (state-owned enterprises, men: 58.3 % and women: 41.7%; non-state enterprises, men: 53.4% ​​and women: 46.6%). However, in the group of foreign-invested enterprises, this rate difference is up to 21%, but women have a much higher participation rate than men (men: 39.9% and women: 60%). ,2%). The data results still confirm that non-state enterprises have not implemented social insurance policies well for female workers compared to foreign invested (FDI) enterprises.

Table 3.5. Time to participate in social insurance of employees in non-state enterprises

Type of business

Source: Project data calculated from the electronic database of social insurance management of Vietnam Social Insurance

- Regarding the place of birth and permanent residence of workers participating in social insurance at non-state enterprises, the results of table 3.6 show that: the majority of workers participating in social insurance at non-state enterprises are Of Hanoi residents, only 13.6% currently reside outside the Hanoi area, 16.2% have permanent residence outside Hanoi. However, if looking at the birthplace factor, this rate is significantly different from the previous two factors, up to 42.3% of social insurance participants have a birthplace outside of Hanoi, this rate is much higher. compared to the factor of household registration outside Hanoi and current residence outside Hanoi. This reflects the huge level of migration among the capital's population in recent years of market economic development; Besides, the openness of the city's immigration policy also increased the proportion of workers with permanent residence in the capital. This is also consistent with the assessment of labor integration about the country's major socio-economic centers.

Table 3.6. Number of employees participating in compulsory social insurance in non-state enterprises divided by place of birth, permanent residence and place of residence in Hanoi

Type of business

Source: Project data calculated from the electronic database of social insurance management of Vietnam Social Insurance

The proportion of social insurance participants without permanent residence in Hanoi in non-state enterprises is higher than social insurance participants without permanent residence in Hanoi in the state sector and the FDI sector. Thus, people with permanent residence in Hanoi are working mainly in state-owned enterprises; The majority of workers without permanent residence in Hanoi work in the FDI and non-state sectors.

This is similar to the World Bank's research on the relationship between household registration and employment issues in businesses: People who register for temporary residence have a very good employment experience. different from people with permanent residence. Specifically, 70% of those with temporary residence registration work in the non-state sector (double the rate of those with permanent residence), and 30% work for foreign businesses. However, those with temporary registration still face many barriers to employment in the public sector [19]. This also coincides with the comments of Le Bach Duong and Nguyen Thanh Liem (2011): " In big cities like Hanoi and Ho Chi Minh City, recruitment by state agencies and public organizations still requires have permanent residence. In fact, sometimes the pressure comes from the city government wanting to prioritize solving the problem of employment for permanent residents . Although legally in the Labor Code, Employment Law

There are no regulations on binding household registration to employment, the right to work, or the right to work of citizens, but in reality, not having permanent residence also significantly reduces, sometimes depriving poor immigrant workers of job opportunities in the competition of the labor market. Survey results by author Pham Van Quyet and his colleagues also show that 57.3% of poor immigrant workers are working with labor contracts (short-term labor contracts, seasonal contracts). survey is working in the official sector but still cannot participate in social insurance. This happens mainly in small and micro enterprises. Where the social insurance management agency and the tax agency often have little management and grasp of the labor situation in these enterprises.

3.3.3.2. Time of employees participating in compulsory social insurance in non-state enterprises

The data results in Table 3.7 show that: among the three types of enterprises, workers working in non-state enterprises have the lowest time participating in social insurance for 10 years or more, at 20%; Foreign-invested enterprises are 21% and state-owned enterprises are 57%.

Table 3.7. Time to participate in social insurance of employees in enterprises in Hanoi city in 2018

Type of business

Source: Project data calculated from the electronic database of social insurance management of Vietnam Social Insurance

In 2017, there were 651 thousand people receiving one-time compulsory social insurance, in the period 2007-2017, there were over 5 million people receiving one-time social insurance from the compulsory social insurance fund, an increase of 15.1%; Meanwhile, only over 1.1 million people have received pension benefits. From

January 1, 2016, according to the provisions of Resolution 93/2015/QH13, employees will receive one-time social insurance after 1 year of quitting their job or not continuing to pay social insurance. However, after 1 year of implementing the regulations, the number of employees The demand for receiving one-time social insurance is still increasing, showing that the majority of workers still choose to receive money and stop paying social insurance instead of continuing to pay social insurance to receive a pension to ensure their life when they finish working age.

The number of new people participating in social insurance increased slowly while the number of people retiring from pensions and the number of people leaving the system to receive one-time social insurance increased rapidly, causing the ratio between contributors and continuing beneficiaries to decrease from 12.9% of contributors. for one beneficiary in 2016 to 8.5% of contributors for one beneficiary in 2016. This fact shows that increasing social insurance participants is very necessary to ensure the sustainability of the social insurance fund.

Table 3.8. Time to participate in social insurance of employees in enterprises in Hanoi city in 2018

Type of business

Source: Project data calculated from the electronic database of social insurance management of Vietnam Social Insurance

Looking at the structure of the number of people participating in compulsory social insurance in the country, the corporate sector accounts for 68.3% of the total number of participants, however, out of the total number of employees participating in compulsory social insurance in the corporate sector, The state-owned enterprise sector only accounts for 10.4%, the foreign-invested sector accounts for 43.4%, and the non-state-owned enterprise sector accounts for 46.2%. Meanwhile in Hanoi, the proportion of workers participating in social insurance in the FDI sector (22.1%) is much lower than in the non-state sector (67.8%). This, shows the collection

The capital's attraction of FDI capital is still limited and has not fully exploited the potential of a political-economic center of the country.

3.3.3.4. Salary deduction for social insurance contributions of employees in non-state enterprises

The 2014 Social Insurance Law stipulates that social insurance contributions are calculated on the basis of the employee's monthly salary. This includes contributions to the pension fund; Sickness and maternity fund; TNLD-NNN fund. So at non-state enterprises, how is the salary deducted for social insurance contributions of employees? The results of the investigation into the implementation of the Social Insurance Law for compulsory social insurance show that: 81.8% of workers said that their premiums for all types of insurance are based on the basic salary (salary stated in the labor contract); 4.4% is deducted based on food received; 1.5% paid at a fixed rate; 12.3% do not know how much they pay [49].

By manufacturing industry, 81.0% of textile and garment workers said they were paid insurance contributions based on their basic salary; electronics workers is 93.1%. By gender, 90.8% of female and 77.1% of male workers agreed with this opinion. Divided by age: under 18 years old, accounting for 50.0%; from 19 - 20 years old, accounting for 80.0%; from 21 to 24 years old, occupy

86.9%; from 24 - 29 years old, accounting for 90.7%; from 30 - 39 years old, accounting for 88.7%, from 40 - 49 years old, accounting for 96.2%; from 50 years old and older is 100.0%. 86.2% of immigrant workers are covered by basic salary insurance; Local workers is 94.7%.

In fact, compared to other countries in the region and the world, Vietnam's current compulsory social insurance payment rate is still high. Therefore, in reality, many businesses tend to avoid paying social insurance to increase profits and reduce costs. Research assessing the impact of the mandatory social insurance policy of the Ministry of Labor, War Invalids and Social Affairs (2012) shows that the average salary paid for social insurance is only less than 70% of the employee's salary, which will lead to When a worker retires, the pension level will be much lower than the salary while working, causing a great impact on the retiree's life and this also puts pressure on pension adjustment. for the social insurance fund. Most businesses currently only pay an average social insurance salary that is much lower than the actual salary of employees in the enterprise sector (only about 60%), this number is higher than in the sector of state agencies. , political organization, socio-politics, however just