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Competitive labor market

Another claim against globalization is that wage inequality is rising in the country. It is found that wages have generally been rising faster in globalizing developing Vietnam than in the past decades (Oostendorp 2002). The fast wage growth is taking place in Vietnam that is actively increasing its integration with the globalized economy. While the general increase in wages is good phenomenon, nevertheless, the detailed results from the Oostendorp research are more complex and pointing out that certain types of Vietnamese employees receive profit more than others.

First, liberated trade is related to a gradual decrease in the gender wage gap. Growing trade creates a more competitive labor market in Vietnam. Groups that have been before discriminated against, for example, women, have today a lot of opportunities (Oostendorp 2002). Second, the income from growing trade appears to be larger for skilled and qualified employees. These findings support other research demonstrating that there has been a global trend toward greater wage inequality.

This means that there is a larger pay gap between educated employees and the less educated. Researchers Galbraith and Liu (2001), for instance, find a widespread trend toward greater wage inequality among developing countries. In Vietnam the price of the main

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agricultural product (rice) went up considerably. At the same time, the price of the main

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imported product (fertilizer) at present went down. These price changes are in a direct manner related to globalization processes.

Over this period of time Vietnam became a major exporter of rice (maintaining its price) and a major importer of fertilizer from inexpensive producers (bringing its price down). In this manner the typical poor family – in Vietnam it is a peasant family – got a much bigger ‘wedge’ between its input money and output money, and its real income went up considerably (Benjamin and Brandt 2002). Some rural families in Vietnam also send a family member to a neighboring city to work in a factory. The normal wage before the global economy was about $9 per month.

This day, however, factory workers manufacturing contract shoes for American companies often earn $50 per month or even more. So the wage for a comparatively unskilled employee has increased something like five times as much. At the same time, wages for some of the skilled professions – for example, computer programmer or English interpreter – may have increased ten times or even more. In this way, a careful analysis of wage inequality in Vietnam probably will show rising inequality. IV. Difficulties that the country must overcome at the moment.

Corruption The above discussion is not to say that Vietnam faces only fair weather in the near future. There are still serious obstacles to growth and economic development that must be overcome. A lot of regulations and corruption still must be cleared away in Vietnam. Complaints regarding red tape and corruption are still frequently encountered. There are also complaints that the Vietnamese legal system has been evaluated as one of the weakest among the developing countries. Ways to stop corruption and improve legal system still need to be found.

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