During the ongoing 5th Ordinary Session of the 9th National Assembly Legislature, Mr. Xayadeth Phouiyavong, a constituent of Savannakhet’s District 13, urged the government to adjust factory workers’ wages based on current exchange rates between LAK and USD.
While praising the government’s efforts in addressing Laos’ economic challenges, Xayadeth proposed a solution to tackle the issue of workers’ wages in factories, especially in companies involved in exports and the generation of foreign currency in the country.
His proposal suggested that in the face of rampant inflation, a worker’s salary should be based on current exchange rates, especially against the US dollar. This would ensure that Lao workers get compensated fairly and maintain a decent standard of living.
Ultimately, the aim is to prevent Lao workers from leaving the country for better opportunities, which negatively impacts the socio-economic development of Laos, he said.
Highlighting the current situation, Xayadeth gave an example of how the minimum wage of LAK 1.3 million per month, once equivalent to USD 150, has now decreased to USD 68. This decline has made it challenging for workers to earn a livable income, highlighting the urgency to address the issue in the face of the ongoing economic decline.
He emphasized that the local workforce is the backbone of the country, and the acute labor shortage is going to negatively impact any efforts to stabilize the economy.
However, Laos, unlike neighboring countries like Cambodia, has a firm grasp on the use of foreign currencies. As the Law on the Management of Foreign Currency published on 30 November 2022 states, payment in foreign currency is prohibited in the country for payment for goods, services, debt, dividends, or taxes, which must be made in LAK. Moreover, employee salary, bonuses, welfare benefits, etc. must also be paid in LAK.
In an effort to retain Lao workers, Xayadeth urged the Ministry of Foreign Affairs to collaborate with the Ministry of Labor and Social Welfare to appoint labor advisers (labor ambassadors) in countries where Lao workers frequently seek employment. The purpose of these advisers would be to safeguard Lao workers from being exploited or getting trapped in human trafficking schemes.