Minimum wage in Vietnam set to increase by 5.5 percent next year

Starting next year, minimum wage in the private sector will increase by 5.5 per cent after three-party negotiations between representatives of the State, employers and employees ended yesterday. Viet Nam News/Asia News Network

HANOI — Starting next year, minimum wage in the private sector in Vietnam will increase by 5.5 percent after three-party negotiations between representatives of the State, employers and employees ended last Friday.

Accordingly, minimum wage for workers in Region I, which covers urban Hanoi and HCM City, is set to rise to VND4.42 million (US$190.5) while workers in Region II – covering rural Hà Nội and HCM City, along with major urban areas in the country like Can Tho, Da Nang, and Hai Phong – will earn VND3.92 million.

Those in Region III, or provincial cities and the districts of Bac Ninh, Bac Giang and Hai Duong provinces, will make at least VND3.43 million a month, while Region IV, or the rest of the country, will make VND3.07 million.

The National Wage Council comprising 15 members – split evenly between the labour ministry, representing the State, Việt Nam Chamber of Commerce and Industry (VCCI), representing the employers, and the Vietnam General Confederation of Labor, representing the employees – holds meetings every year to debate the regienal minimum wage for the next year.

Deputy minister of labor Doan Mau Diep said the current minimum wage has met 95 per cent of the labor force’s minimum living standards so the raise would make their lives more comfortable.

The labour ministry presented three schemes: increasing the minimum wage by 4.9 percent, 4 per cent or 6 percent.

The VCCI argued that since the minimum wage has already met 95 percent of the basic living demands, there’s no need for any further increase to the workers’ wage in 2020.

The group said if there should be an increase, the rate should be kept at 1-2 percent, because boosting minimum wage would increase businesses’ expenditures and hurt their performance, but the organisation said it acknowledged the calls for higher minimum wage from the State and from employees given robust economic growth in recent years.

Hoang Quang Phong, vice chair of VCCI, said this result “will not bring any smile to the business community but we are sympathetic and willing to share the workers’ difficulties.”

The labour confederation said that though the final result fell short of its hopes for a more than 6 percent increase, 5.5 percent serves as a “middle ground” most of the Council members could agree upon.

Minimum wage in Vietnam has been rising for the last three years, with year-on-year increases of 7.3 percent,  6.5 percent and 5.3 percent in 2017, 2018, and 2019, respectively.