When prices were stable, VND800,000 would be enough for Linh to buy food for one-week use. However, as things are getting more expensive, Linh has to pay much more for food and cut expenditures on nonessentials. 

Linh’s real monthly salary is higher than the regional minimum wage, but she hopes that if the government raises the minimum wage by 6 percent, her company will also raise the real monthly pay proportionally to cover price escalation.

Le Ngoc Linh from Thanh Hoa province, who is now a worker in Que Vo Industrial Zone  in Bac Ninh, said she was excited after hearing about the 6 percent wage increase starting July 1, 2024.

Linh said goods prices have been escalating recently, while jobs have been unstable because her company has received few orders. Linh and her husband have had to leave their kids with their parents in their hometown. The couple sends their parents VND4 million a month to cover their children’s needs. Meanwhile, they have to pay VND2 million a month for electricity, water and internet in Hanoi.

The adjustment of the regional minimum wage in 2024 faces challenges because of the layoff wave which began in late 2022.

In such conditions, the chair of the National Wage Council, Le Van Thanh, said the 6 percent increase in minimum wage is a reasonable decision, which is satisfactory for workers and bearable to employers.

Le Dinh Quang from the Vietnam Labor Federation also thinks that the 6 percent increase can partially satisfy workers’ expectations. Workers expected a sharper increase, but in current conditions, 6 percent is acceptable.

“Even the Vietnam Chamber of Commerce and Industry (VCCI), which represents employers, also recognizes the good will of laborers, who have accepted unchanged salaries over the last two years. Therefore, increasing minimum wage is a must. But in current conditions, the increases need to be reasonable to protect businesses,” Quang said.

In principle, the setting of a regional minimum wage aims at protecting disadvantaged laborers. This is the minimum wage employers have to pay to workers in normal working conditions.

According to the International Labor Organization, in 2015-2022 in Vietnam the minimum wage was raised from $119 in December 2015 to $168 in December 2022. However, because of inflation, the real increase of the minimum wage was modest.

In 2015-2019, the nominal minimum wage increased by 42.7 percent, but because of inflation, the real increase was just 20.1 percent.

Vu Diep