Regional minimum wage to increase by 6 per cent next year

A textile worker at a factory in Thu Duc, Ho Chi Minh city

The National Wage Council on Wednesday gave the green light to lifting the regional minimum wage by 6 per cent next year.

The increase will be submitted to the Government for approval. If approved, the regional minimum wage increase will take effect on July 1, 2024.

According to the change, the wage in Region 1 will be adjusted from VND4.68 million (US$192) to VND4.96 million ($204) per month.

The 6 per cent increase is equivalent to a rise of VND250,000 in Region 2, and VND220,000 and 200,000 in Regions 3 and 4, respectively.

Currently, the minimum monthly salary of workers in enterprises in Region 2 is VND4.16 million; in Region 3, it is VND3.64 million ($149.4); and in Region 4, it is VND3.25 million ($133.3).

The minimum hourly wage will also increase by 6 per cent, ranging from VND16,600 to VND23,800, which also depends on the region.

Region 1 covers the urban areas of Ha Noi and Ho Chi Minh city; Region 2 encompasses the rural areas of Ha Noi and Ho Chi Minh city, along with major urban areas in the country such as Can Tho, Da Nang and Hai Phong; Region 3 covers provincial cities and the districts of Bac Ninh, Bac Giang and Hai Duong provinces; and Region 4 comprises the rest of the country.

Le Van Thanh, Deputy Minister of Labour, Invalids and Social Affairs, said all members of the National Wage Council agreed upon the 6-per-cent increase. This shows difficulty sharing between enterprises and labourers.

The wage increase plan has been evaluated based on economic difficulties, world fluctuations, and complex trade barriers. The council has also taken into consideration the difficult circumstances of workers in recent times due to fluctuations in prices and businesses lacking orders.

In the latest adjustment of the regional wage minimum on July 1, 2022, the rate also increased by 6 per cent.

According to experts, increasing the regional minimum wage in 2024 is a difficult decision due to difficult economic trends, businesses lacking orders and unemployment.

Without a salary increase, it will be difficult to meet the workers’ needs in the context of inflation, while the base salary of the State sector and pensions already increased last July.

The regional minimum wage is the lowest level and is used as the basis for businesses to negotiate and pay wages to labourers. This amount applies to individuals working under the employment contract framework of the Labour Code; working within enterprises; cooperatives, farms, households, individuals, and other Vietnamese organisations that employ staff under contracts; as well as foreign organisations and individuals in Việt Nam that employ labourers.

The International Labor Organization (ILO) assesses that since 2015, Vietnam has always increased the minimum wage stably and consistently, from $119 month to the current $168 per month. Overall, in the 2015-22 period, the minimum wage in Vietnam increased by a total of 19.8 per cent.

In the ASEAN region, Vietnam is one of the few countries to maintain salary increases that help increase the real value of workers.

The ILO recommends that authorities adjust minimum wages to keep up with inflation to keep the real value of wage increases for workers while measuring their needs and their families’ to promote social justice. Salary adjustments also need to be based on accurate data on inflation, economic growth, employment, solvency of businesses and labour productivity.

VNS-THANH BINH