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Applying some statistical methods to study the situation of income distribution in enterprises in the Vietnamese industrial sector - 14


From the production and business point of view, for the sake of the existence and development of enterprises, it is necessary to maintain a certain ratio of the enterprise's net income (M 2 ) to the net added value (M 2 / NVA). For the State economic sector, this is the financial basis for enterprises to set up funds; for the private economic sector, it can be considered a legitimate remuneration for enterprise owners.

From the perspective of macroeconomic regulation of the economy, it is necessary to maintain the ratio of state budget payments to net added value. Thus, income distribution in a socialist-oriented market economy must ensure the harmony of three types of interests: the interests of the State, the interests of enterprises and the interests of workers.

In Vietnam as well as in other countries, there are no specific regulations on the ratio of total income distribution according to the above 3 types of benefits. However, in each stage of economic development, the State often uses macroeconomic tools to regulate income such as tax policies, wages, financial and monetary policies, and credit.

a. Income distribution among 3 interests by level I industry

+ About income structure by level I industry

Table 2.19 Average net added value structure of an industrial enterprise by level I industry in 2001-2003

Unit: %




TT value

net (NVA)

remuneration

Labor (V)

Tax & Pay NS

(M 1 )

Net income

DN (M 2 )

General industry level I

2001

100

30.0

23.9

46.1

2002

100

33.3

18.0

48.7

2003

100

35.9

18.9

45.2

Mining

2001

100

65.2

6.4

28.4

2002

100

63.0

6.2

30.8

2003

100

64.7

6.4

28.9

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Applying some statistical methods to study the situation of income distribution in enterprises in the Vietnamese industrial sector - 14


Processing industry

2001

100

28.4

24.9

46.8

2002

100

31.8

18.7

49.5

2003

100

34.3

19.7

46.0

Production and distribution of electricity, gas and water

2001

100

26.6

14.4

59.0

2002

100

33.5

11.3

55.2

2003

100

36.6

4.8

58.5

Source: Calculation from the 2001-2003 enterprise survey sample, General Statistics Office. Table 2.19 shows that, in the whole industry, the proportion of first-time income of workers including wages, social insurance and non-wage income accounted for in production costs that enterprises pay directly to workers increased from 30% in 2001 to 35.9% in 2003.

Net income of enterprises accounts for 45.2-48.7% of the total net added value and has a tendency to increase and then decrease in the 3 years 2001-2003. State income including taxes and budget payments accounts for 18-23.9% of the total net added value and has a tendency to decrease. Thus, the income distribution of enterprises in general is in the following proportion: the portion left for enterprises is the largest (45.2-48.7%), the portion distributed to workers is relatively large (30-35.9%), and finally the portion paid to the State budget is the lowest (18-23.9%).

By industry group, we see that the share allocated to labor in the total net value added (V/NVA) of mining enterprises and enterprises in the production and distribution of electricity, gas and water is very large and accounts for about 2/3 of the total net value added. Meanwhile, this share of enterprises in the processing industry and enterprises in the production and distribution of electricity, gas and water accounts for only 1/3 of the total net value added.

Therefore, the remaining income of mining enterprises is not large and accounts for about 1/3 of the total net added value. This part of the enterprise


The processing industry and enterprises in the production and distribution of electricity, gas and water account for more or less half of the total net added value.

Taxes and budget payments of mining enterprises are very small, accounting for only about 6% of total net added value; this portion of enterprises in the production and distribution of electricity, gas and water accounts for about 10% and of enterprises in the processing industry accounts for about 20% (Table 2.19). This shows that the contribution of enterprises to the state budget is not high.

The calculation results show that, in general, the first income of enterprises usually accounts for the largest proportion, followed by the income of workers and then the income of the State. However, if we consider each level I industry separately, we can see that the net income of mining enterprises accounts for a much lower proportion than the income of workers, while the income proportion of enterprises in the processing industry and enterprises in the production and distribution of electricity, gas and water is 1.5 to 2 times larger than the first income proportion of workers. This can be explained by the fact that the investment capital in mining is not much, mainly using human power to exploit nature; meanwhile, the investment capital in production of the processing industry and production and distribution of electricity, gas and water is 2 to 3 times larger than the investment capital in mining production (see Table 2.12).

+ On production and business efficiency by level I industry

The calculated data in Tables 2.19 and 2.20 show that the share of labor in the total net added value of enterprises in the electricity, gas and water production and distribution industry is high (55.2-59%), so the average monthly income of a worker in this enterprise is also high (1.6-1.9 million VND/month/person), and that is also a reason why the labor productivity (61.9-75.5 million VND/person) and the profit margin per worker (34.4-44.6 million VND/person) of this enterprise are high.

The share of labor in the total net added value of mining enterprises is also very high (63-65.2%) and the average monthly income of


The average salary of 1 employee in this enterprise (1.2-1.6 million VND/month/person) is higher than the average, but the labor productivity (23.3-31 million VND/person) and profit margin per employee (6.6-9 million VND/person) of this enterprise are very low.

Table 2.20 Some average production and business efficiency indicators of an industrial enterprise by level I industry in 2001-2003

Unit: million VND/person



Performance indicators


Average income/month/1 worker


Labor productivity/year

Profit margin per employee/year

W=NVA/L

M 2 /L

V/L/12

General industry level I

2001

41.8

19.3

1,045

2002

43.5

21.2

1,209

2003

46.2

20.9

1,381

Mining

2001

23.3

6.6

1,266

2002

26.4

8.1

1,388

2003

31.0

9.0

1,673

Processing industry

2001

43.3

20.2

1,022

2002

44.9

22.2

1,190

2003

47.3

21.8

1,354

Production and distribution of electricity, gas and water

2001

75.5

44.6

1,672

2002

61.9

34.2

1,730

2003

64.4

37.7

1,967

Source: Calculation from 2001-2003 enterprise survey sample, General Statistics Office.


The share of labor in the total net added value of enterprises in the processing industry (28.4-34.3%), the average monthly income of a worker (1-1.3 million VND/month/person) and the profit margin per worker (20.2-22.2 million VND/person) of this enterprise are all below the average. In particular, labor productivity (43.3-47.3 million VND/person) is above the average and ranks second after the electricity, gas and water production and distribution industry.

This shows that although the proportion of the share shared with workers in the total net value added (V/NVA) of mining enterprises is very high, the production activities of these enterprises are inefficient; meanwhile, the production and business efficiency of enterprises in the electricity, gas and water production and distribution industry is very high. The reason may be that the labor force in the mining industry is mainly manual labor, the production cost is high, so the production efficiency is low; meanwhile, the labor force in the electricity, gas and water production and distribution industry has technical expertise, the production cost is lower, so the production efficiency is higher; while the processing industry has low technology content, but uses a lot of labor, so the production efficiency is not high.

b. Income distribution among 3 interests by economic type

+ About income structure by economic type

We see that the income distribution of state-owned enterprises according to 3 benefits is relatively even: the first income of workers accounts for a large proportion of about 37.6-44.8%, the first income of the State from enterprises accounts for about 26.6-31.1% and the net income of state-owned enterprises accounts for about 26.7-31.2% of total income (NVA).

Meanwhile, the portion left for non-state enterprises and foreign-invested enterprises is quite large and they account for about 40.1-51.4% and 55.5-57.9% respectively of the total net value added (NVA). The portion shared with employees of non-state enterprises and foreign-invested enterprises accounts for about 38.6-41.7% and 20.6-28.5% respectively.


Table 2.21 Average net added value structure of an enterprise by economic type in 2001-2003

Unit: %




Net TT Value

(NVA)

Labor remuneration

(V)

Tax & Pay

(M 1 )

Net income

DN (M 2 )

3 types in common

2001

100

30.0

23.9

46.1

2002

100

33.3

18.0

48.7

2003

100

35.9

18.9

45.2

State-owned enterprise

2001

100

37.8

31.1

31.2

2002

100

37.6

26.6

35.8

2003

100

44.8

28.5

26.7

Non-state enterprise

2001

100

41.7

18.2

40.1

2002

100

39.4

9.3

51.4

2003

100

38.6

11.6

49.8

Foreign invested enterprise

2001

100

20.6

21.5

57.9

2002

100

27.3

15.4

57.3

2003

100

28.5

16.0

55.5

Source: Calculation from the 2001-2003 enterprise survey sample, General Statistics Office. Taxes and budget payments of non-state enterprises are very low, accounting for only 9-18%; this part of foreign-invested enterprises accounts for 15-22%.

net value added (NVA) (Table 2.21).

Thus, state-owned enterprises have the highest contribution rate to the state budget, while non-state enterprises have the lowest contribution rate. The net income ratio of foreign-invested enterprises and non-state enterprises is very high while that of state-owned enterprises is low. The reason may be


The reason is that for non-state enterprises and enterprises with foreign investment, the business owner is the one who invests capital in production, so the remaining portion for the enterprise is more.

+ On production and business efficiency by economic type

Surprisingly, the employee share (V/NVA) of non-state enterprises is higher than that of state-owned enterprises and foreign-invested enterprises, but the average monthly income of a worker in a non-state enterprise is the lowest (0.7-0.9 million VND) and the labor productivity of this enterprise is also the lowest (21.5-29.2 million VND/person) and the profit margin is also low (8.6-14.9 million VND/person).

Table 2.22 Some average production and business efficiency indicators of an enterprise by type in 2001-2003

Unit: million VND/person



Performance indicators


Average income/month/person

Labor productivity/year

Profit margin

profit per employee/year

W=NVA/L

M 2 /L

V/L/12

3 types in common

2001

41.8

19.3

1,045

2002

43.5

21.2

1,209

2003

46.2

20.9

1,381

State-owned enterprise

2001

33.7

10.5

1,061

2002

38.8

13.9

1,217

2003

38.5

10.3

1,439


Non-state enterprise

2001

21.5

8.6

0.745

2002

26.2

13.5

0.861

2003

29.9

14.9

0.963

Foreign invested enterprise

2001

82.4

47.7

1,417

2002

72.0

41.2

1,642

2003

75.9

42.1

1,806

Source: Calculation from 2001-2003 enterprise survey sample, General Statistics Office.

The portion allocated to workers in the total net added value of foreign-invested enterprises is not high, but the average monthly income of a worker in this enterprise is high (1.4-1.8 million VND/month/person) and the labor productivity (72-82 million VND/person) and average profit margin (41.2-47.7 million VND/person) of this enterprise are high.

The share of labor in the total net added value of state-owned enterprises is also high, but the average monthly income of a worker in this enterprise is at an average level (1-1.4 million VND/month/person) and the labor productivity (33.7-38.8 million VND/person) and average profit margin (10.3-13.9 million VND/person) of this enterprise are lower than the general average.

There seems to be a paradox between the income distribution of domestic enterprises and foreign-invested enterprises. Domestic enterprises have low labor productivity and profit margins, but the initial income distribution ratio between labor and enterprises seems to be more •fair• compared to foreign-invested enterprises, where labor productivity and profit margins are high, but the income distribution ratio between labor and enterprises is very different.

It is argued that in order to improve the position and life of workers, the problem is to create all conditions for the net value added NVA to increase continuously. Not only is the NVA pie getting bigger, but the proportion of workers

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