Brian Jeffrey
On June 26, the inaugural session of the National Wage Council for the 2026 minimum wage strategy took place, where the Vietnam General Confederation of Labor (VGCL) put forth two proposals for wage increases of 9.2 percent and 8.3 percent. This recommendation stemmed from an evaluation of the implementation of Decree 74/2024/ND-CP across various regions, sectors, and businesses.
A labor specialist highlighted that the suggested wage hikes of 8.3 percent and 9.2 percent are justified, considering that prevailing income levels do not adequately meet the basic living standards for a significant portion of the workforce.
Nhac Phan Linh, Vice Director of VGCL’s Institute for Strategic Research and Labor-Union Magazine, emphasized that new wage levels must factor in socio-economic dynamics. With Vietnam aiming for developed, high-income nation status by 2045, Linh noted that per capita income must rise to $15,000, an increase from the current $4,700.
This implies a need for an annual income increment of over $400 per individual (which translates to more than VND10 million).
Linh urged the National Wage Council to adopt a fresh perspective, distinguishing it from past discussions.
“Certainly, adjusting the minimum wage still heavily relies on the price index, cost of living, and so on… However, it’s crucial to also take into account the political objectives outlined by the Party and State to usher in significant change,” Linh stated.
While the suggested increases surpass the 6 percent rise set for 2024, they pale in comparison to the escalating costs associated with living expenses, childcare, housing, and healthcare.
Recent studies revealed that many workers manage only basic expenses with virtually no savings, and some even depend on frequent loans to cover costs. Furthermore, the established minimum wage, viewed as a “social safety net,” does not adequately represent the genuine value of labor or essential living requirements.
The recommended 9.2 percent wage increase signifies progress, yet long-term changes must be aligned with real-life conditions to ensure that the minimum wage genuinely supports workers.
The expert suggested that adjustments to the minimum wage should be implemented before January 1, 2026, helping workers navigate current challenges. Present income levels fall short of meeting essential living expenses, compelling many to borrow or work extra hours, adversely affecting their health and quality of life.
A VGCL survey conducted in March-April 2025 with 3,000 workers from 10 major regions illustrates a troubling scenario regarding living standards: 12.5 percent of workers borrow money each month; 29.9 percent borrow sporadically (about 3-4 times a year); 26.3 percent adopt frugal living; and 7.9 percent are unable to meet their financial obligations.
In addition, slightly over half (55.5 percent) of workers indicated that their main meals consist of enough meat or fish—a basic necessity that remains unattainable for many families. Insufficient nutrition not only affects health and productivity but also jeopardizes long-term quality of life.
The survey revealed that wages serve not only to cover daily expenses but also play a significant role in major life choices.
As many as 72.6 percent of unmarried workers identified their current income as a significant hurdle to marriage, while 72.5 percent of those already married said wages influence their decision to have more children.
More than 53.3 percent of workers reported that their income covers just part (over 50 percent) of their children’s educational expenses.
These findings indicate that minimum wage discussions extend beyond financial matters; they influence future security and social structure.
In today’s climate, delaying a revision of the regional minimum wage is not an option. It is both a legal right and a fundamental requirement for workers to live up to the worth of their labor.
A viable minimum wage must not only account for social insurance contributions but also adequately support individuals, raise families, maintain health, and uphold a basic quality of life—criteria that many workers still aspire to meet.
VGCL reported that labor productivity is projected to rise by 5.88 percent in 2024, surpassing the National Assembly’s target of 4.8–5.3 percent. This marks a positive development in the path towards achieving an average annual productivity increase of over 6.5 percent by 2030.
With economic policies like tax breaks, fee waivers, and improved access to land and finance, 2025 is expected to be a pivotal year in establishing a foundation for development in the 2026–2030 period.
