Vietnam set for 6% minimum wage hike next year

The Vietnam General Confederation of Labor proposed a 6.48% or 7.3% wage raise, based on the fact that businesses have seen increases in orders.

The Vietnam Chamber of Commerce and Industry, representing businesses, proposed a 4.5-5% rate, saying that new orders were just coming back and it’s important to keep business operations sustainable.

The meeting was the second held to discuss minimum wage raise next year, after the first in August did not come up with any agreement.

After negotiation, all 16 members of the National Wage Council voted for a 6% rate, meaning the minimum wage will be raised between VND200,000-280,000 (US$8.22-11.50), depending on regions, to VND3.45-4.96 million a month.

The minimum wage was raised 5.88% to VND4.68 million ($197.07) per month in July last year.

Le Van Thanh, chairman of the council and vice minister of labor, said the 6% rate, now pending government’s approval, guarantees “harmonious” benefits of workers and businesses.

The wage hike is considered as Vietnam recorded a 4.27% inflation and 3.22% CPI in the first 11 months this year, and businesses have been struggling with plunges in orders, leading to waves of layoffs since late 2022.

The International Labor Organization in Vietnam has said that wage increase should factor in inflation and economic growth. It said Vietnam raised minimum wage by 6% between 2020 and 2022, but given inflation, workers’ actual income only rose by 0.7%.

A survey by Vietnam General Confederation of Labor in the first half of this year found factory workers earned an average of VND7.88 million a month while their family’s expense was VND11.7 million.

The survey found living costs had increased by 19% from 2022.