Many workers in the garment and textile industry are expected to move from struggling small firms to larger ones as the economic downturn magnifies disparities in wages between the two categories, said Vu Ngoc Quyen of the Trade Union of Garment and Textile Workers. Until six months ago, workers at small firms could do a lot of overtime work, meaning their total income was close to the wages paid by larger companies. But now, with the industry hit hard by the global economic turmoil, small businesses are struggling to maintain sales and their workers can no longer work overtime.

With the gap in wages and bonuses gradually increasing, Quyen said it is likely that small companies would face a shortage of workers after Tet (Lunar New Year festival). Successful companies like Nha Be, Phong Phu and Viet Tien pay workers as much as VND2.6 million (US$148) a month on average while smaller firms pay around VND1.8 million (US $103).

Pham Xuan Hong, Deputy Chairman of the Vietnam Textile and Garment Association, said while some large firms received enough orders for the first half of this year, smaller ones are still trying to get enough contracts to avoid layoffs. The large companies will pay VND 5-6 million as Tet bonuses while the smaller ones are likely to pay just a month’s wage or even less.