The Vietnam National Wage Council has unanimously proposed an average 7.8% increase in regional minimum wages for 2027. This adjustment follows labor demands made in June, which were negotiated in July, citing the rising cost of living for workers. However, this proposal is still in the suggestion phase and must undergo government procedures for final approval.
According to local media, including VnExpress, the council proposed the wage increase during a second negotiation session held on July 16. If approved, the new minimum wages, effective January 1, 2027, will range from 570,000 dong (approximately $32.40) in Region 1 to 404,000 dong (about $23) in Region 4. Currently, the minimum wages are 531,000 dong in Region 1, 473,000 dong in Region 2, 414,000 dong in Region 3, and 370,000 dong in Region 4. The increases will be 39,000 dong, 35,000 dong, 31,000 dong, and 34,000 dong, respectively.
Vietnam's minimum wage system differs from South Korea's, as it is not a nationwide standard. Instead, it is divided into four regions based on economic conditions and industrial concentration. Region 1 includes major urban areas like Hanoi and Ho Chi Minh City, while Regions 2, 3, and 4 encompass less economically developed areas.
Notably, the increase in Region 4, which has the lowest wages, is 34,000 dong, surpassing the 31,000 dong increase in Region 3. This adjustment aims to improve the living conditions of workers in lower-wage areas.
On June 25, a survey revealed the financial burdens faced by workers, highlighting the impact of wages on marriage and childbirth. The Vietnam General Confederation of Labor surveyed 2,000 workers from about 200 companies across seven provinces and cities between March and April. The findings indicated that wages significantly affect marriage, childbirth, housing, education, and healthcare costs. Based on this, labor representatives initially proposed a minimum wage increase of 9.8% or 8.5% starting January 1, 2027.
The survey found that 55% of single workers cited wage pressure as the main reason for delaying marriage, while 73% of married workers reported that current wages influenced their plans for additional children. Labor unions explained that wages affect not only daily expenses but also the ability to purchase homes, save, and prepare for the future.
The survey also highlighted education and healthcare costs. About 55% of workers stated that their wages only partially cover their children's education expenses. Only 40% felt their current income was sufficient for basic medical care, a decrease from 44% in 2025.
Housing conditions were also concerning, with approximately 32% of respondents living in private rentals and nearly 1% residing in company dormitories. Many shared small rooms averaging 23 square meters, resulting in less than 8 square meters of space per person.
The issue of insufficient income was evident, with 54% of respondents indicating their earnings barely covered basic family expenses. Seventeen percent reported needing to cut back on spending to make ends meet, while 21% supplemented their income through overtime. Only 8% felt they could save, and the number of respondents regularly borrowing money to cover shortfalls doubled from 13% in 2025 to 27% in 2026.
Employers have approached the wage increase cautiously since negotiations began last month. The Vietnam Chamber of Commerce and Industry (VCCI) proposed a 5% increase starting July 1, 2027, citing concerns about companies' financial capacity and competitiveness. Hoang Quang Phong, VCCI's vice president, stated, "If the increase is too high, it will be difficult for businesses." The final proposal of an average 7.8% increase reflects a compromise between labor demands and employer concerns. Ngo Yuy Hieu, vice president of the Vietnam General Confederation of Labor, noted that while the unions initially sought a higher figure, the 7.8% increase was a satisfactory outcome for all parties involved.
Employers acknowledged the agreement while emphasizing the need for productivity and resilience in the face of economic challenges. Hoang Quang Phong expressed concern about companies' recovery amid economic difficulties, stating, "Workers also need to continue learning, adhere to work discipline, and enhance productivity in their roles."
Rising prices have been a significant factor in these discussions. As of June 25, the consumer price index for the first five months of the year rose by 4.31% compared to the same period last year, with the average increase for the first half of the year recorded at 4.38%. Housing, electricity, water, fuel, and construction materials saw increases of over 6.7% in the first half of the year, with rental prices rising by 6.3%, repair materials by over 14%, and household electricity costs by 5.54%.
* This article has been translated by AI.
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