Vietnam PM asks labor ministry to draft minimum wage hike

Prime Minister Pham Minh Chinh has asked Vietnam’s Ministry of Labor, Invalids and Social Affairs to compile a draft minimum wage hike for workers.

PM Chinh made the request at a regular cabinet meeting late last week that focused on socioeconomic development. He also ordered the labor ministry to focus on implementing social welfare policies.

Besides, the Ministry of Home Affairs has been tasked with compiling a plan to update wages for civil servants and public employees.

The Ministry of Science and Technology's task is to deploy solutions to enhance labor productivity.

Vietnam’s most recent minimum regional wage hike was in July 2022. The rates were set at between VND3.25 million ($137) and VND4.68 million ($197) across four regions, equivalent to between VND15,600 ($0.66) and VND22,500 ($0.95) per hour.

The average monthly income of a worker in Vietnam was VND7 million ($297) in the second quarter of this year, down by VND79,000 ($3.36) or 1.14% versus Q1/2023, according to the General Statistics Office (GSO). This figure was already above the minimum regional wage.

Vietnam’s workforce grew 1.35% year-on-year to 52.3 million in Q2/2023, including 27.67 million male and 24.65 million female workers. The proportion of trained workers was 26.8%, up 0.6 percentage points year-on-year. Meanwhile, the country’s unemployment rate rose 0.05 percentage points from Q1/2023 to 2.3% in Q2/2023, or over 1.07 million people, the GSO reported.

In August, the National Wage Council conducted a meeting to discuss a suitable wage hike for next year. The Vietnam General Confederation of Labor, the head of all labor unions across the country, proposed a 5-6% increase for the minimum regional wage next year.

A survey of the labor confederation showed that a hike of 11.34% would fulfill the minimum livelihood needs for workers and their families, but in order to help businesses amid challenges, a lower rate had been suggested, said Le Dinh Quang, vice head of the confederation’s labor relation department.

Concluding the event, Deputy Minister of Labor, Invalids and Social Affairs Le Van Thanh asked relevant sides to continue monitoring the situation and prepare for the next meeting in November to vote for the hike.