At the recent first meeting of the National Wage Council, the proposed 9.2 percent minimum wage increase for early 2026 was considered relatively high compared to the 6 percent adjustment in 2024. 

However, Dang Ngoc Tung, former Chair of the Vietnam General Confederation of Labor (VGCL), told VietNamNet that when compared to the rising costs of living, child-rearing, rent, and healthcare, this increase remains inadequate. 

"Over the years, the minimum wage has only risen by about 5-7 percent annually, while prices have increased by an average of 10-12 percent. Wages barely rise before the market preemptively hikes prices for everything, from electricity and water to workers' meals," Tung said.

He argued that calling it a "wage increase" is misleading because it merely adjusts nominally without covering inflation. A true overhaul of wage policy is needed, starting with ensuring that the minimum wage meets the minimum living standard, not falling short while still being labeled an "increase."

Minimum wage fails to meet minimum living standards

Tung noted that despite regular adjustments, the regional minimum wage still falls short of the minimum living standard mandated by law. 

"The highest minimum wage is less than VND5 million. In urban areas like Hanoi and HCMC, living costs are much higher. Even with two workers earning a combined VND14-15 million per month, life remains very tough," he explained.

The minimum living standard should not just cover food and clothing but also education, healthcare, housing, transportation, and emotional well-being—basic needs for workers to live and work sustainably. Current minimum wage policies cannot remain stuck in negotiations over small percentage increases. 

"We need a shift in mindset and approach. The minimum wage must be based on real data about living costs in each region, with strong involvement from trade unions, independent experts, and fair state regulation. If the gap between wages and living costs persists, workers won’t stay in the market, and businesses will face severe labor shortages," Tung warned.

Trade unions must not compromise easily

Having represented workers on the National Wage Council for years, Tung stressed that VGCL must be more resolute in protecting workers’ interests. 

"In the past, wage council meetings were intense. Trade unions must address the core issues and not compromise easily under pressure from employers," he said.

Responding to claims that wage increases may burden businesses, Tung argued that workers directly drive productivity and profits. Neglecting their material and emotional well-being will make it impossible for businesses to retain quality labor. 

He cited Japanese companies in Vietnam that pay higher wages, offer good benefits, and maintain professional work environments while still achieving high profits.

"Higher wages, investment in training, and better living conditions lead to loyal workers, higher productivity, better product quality, and stronger business competitiveness. That’s the real path to sustainable development," Tung said.

From July 1, 2024, the minimum wage under Decree 74 is:

Region I: VND4.96 million/month ($23.8/hour)

Region II: VND4.41 million/month ($21.2/hour)

Region III: VND3.86 million/month ($18.6/hour)

Region IV: VND3.45 million/month ($16.6/hour)

In 2024, the minimum wage increased by 6 percent, but from 2020 to 2023, adjustments were paused due to the Covid-19 pandemic’s impact on businesses.

The minimum wage scheme has been in place in Vietnam for 12 years. Some argue it’s time to move toward a "living wage" rather than a minimum wage. 

Le Dinh Quang, Deputy Head of VGCL’s Policy, Law, and Labor Relations, noted that abandoning the minimum wage is premature because labor relations and market-based wage negotiations in Vietnam are still weak. He said the need to maintain the wage council to negotiate annual minimum wage increases.

Bui Sy Loi, former Deputy Chairman of the NA’s Social Affairs Committee, explained that the minimum wage, as defined by the Labor Code and the International Labor Organization, ensures that the lowest-paid workers in simple jobs under normal conditions can meet basic living needs for themselves and their families. It is not a universal wage but a floor for the lowest earners.

The minimum wage, as defined by the International Labor Organization (ILO) and national laws, is the lowest wage paid to workers for simple jobs under normal conditions to ensure a living standard that meets the basic needs of the worker and their family.

Vu Diep