Vietnam's National Wage Council has officially proposed a 7.2% increase in the regional minimum wage, effective January 1, 2026. This decision, reached with strong consensus among tripartite stakeholders, aims to improve the living standards of workers, particularly those in the lowest wage brackets, and align with the country's ambitious economic growth targets. The adjustment, which varies slightly across Vietnam's four regions, is expected to positively impact worker morale and productivity while prompting businesses to refine their operational efficiencies and talent retention strategies.
A Critical Adjustment for Worker Well-being and Economic Growth
Vietnam is set to implement another significant adjustment to its regional minimum wage, with a proposed 7.2% increase slated to take effect from January 1, 2026. This decision comes after the National Wage Council, a tripartite body comprising representatives from the government, labor unions, and employers, reached a strong consensus during its second meeting of 2025 on July 11.
The proposed hike reflects Vietnam's robust economic growth trajectory and its commitment to ensuring a better quality of life for its workforce. This adjustment is particularly crucial for improving the livelihoods of workers, especially those at the entry-level, who are most impacted by inflationary pressures and rising living costs.
Details of the Proposed Increase
The 7.2% average increase translates to an additional VND 250,000 to VND 350,000 (approximately $10 to $14 USD) per month, depending on the region. The specific proposed monthly minimum wages for each of Vietnam's four regions are:
Region I: From VND 4.96 million to VND 5.31 million (an increase of VND 350,000, or 7.1%)
Region II: From VND 4.41 million to VND 4.73 million (an increase of VND 320,000, or 7.3%)
Region III: From VND 3.86 million to VND 4.14 million (an increase of VND 280,000, or 7.3%)
Region IV: From VND 3.45 million to VND 3.70 million (an increase of VND 250,000, or 7.2%)
The proposal, which saw 13 out of 16 council members vote in favor, will now be submitted to the Government for official approval.
Rationale and Stakeholder Perspectives
Deputy Minister of Home Affairs and Chairman of the National Wage Council, Nguyen Manh Khuong, highlighted that the proposed increase is well-aligned with Vietnam's current economic development and supports the national growth target of 8% in 2025, with aspirations for double-digit growth in the years ahead.
Labor Unions' View: Ngo Duy Hieu, Deputy President of the Vietnam General Confederation of Labor (VGCL) and Vice Chairman of the National Wage Council, expressed satisfaction that the proposal largely meets the expectations of union members and workers. He emphasized that the wage increase serves as a motivation for workers to contribute more actively to national economic goals and helps improve living standards, especially for those at the base wage level. The VGCL had initially proposed a higher increase, ranging from 8.3% to 9.2%, to better offset rising living costs, but expressed acceptance of the 7.2% consensus.
Business Perspective: Hoang Quang Phong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI) and Vice Chairman of the National Wage Council, noted that while the business sector initially pushed for a more modest increase (3% to 5%), they ultimately supported the consensus. He acknowledged that businesses would need to prepare for higher labor costs by reallocating tasks, improving management systems, adopting technological solutions, and upgrading overall operations to maintain performance and retain skilled workers.
Economic and Social Impact
The regional minimum wage serves as a crucial social safety net, defining the lowest permissible wage for workers performing the simplest jobs under normal working conditions. While many businesses already pay above the minimum, this adjustment significantly impacts the lowest-income earners and acts as an important reference point for overall wage-setting across industries.
Previous surveys by the VGCL have indicated that a significant portion of Vietnamese workers struggle to cover basic living expenses, with many resorting to borrowing or working extra hours. This proposed increase, following a 6% hike in July 2024, is expected to provide some relief against inflation, which in June 2025 was around 3.57%.
The adjustment is seen not just as a financial measure but as a strategic investment in human resources, aiming to boost labor productivity and encourage workers' commitment to national development goals. As Vietnam continues its journey towards becoming a high-income country by 2045, such targeted wage adjustments are considered vital for ensuring equitable growth and social stability.