Vietnam to Raise Minimum Wage from 2027 Amid Inflation Concerns

Vietnam is set to raise regional minimum wages by an average of 7.8% from January 1, 2027. The new minimum wage will be VND 5.7 million/month for Region I, VND 5.08 million for Region II, VND 4.45 million for Region III, and VND 4.04 million for Region IV. This adjustment aims to protect vulnerable workers and serve as a basis for wage negotiations. A recent survey by the Vietnam General Confederation of Labor found that 20.6% of workers do not earn enough to live on, 54.3% barely cover basic expenses, and 17.2% live in hardship. The wage adjustment is based on GDP growth, the consumer price index, and labor productivity. Ngo Duy Hieu, Vice President of the Vietnam General Confederation of Labor and Vice Chairman of the National Wage Council, stated that the increase will help improve workers' lives while supporting businesses in maintaining production recovery. However, concerns about inflation persist. Nguyen Van Bang, a worker at the North Thang Long Industrial Park in Thien Loc commune (Hanoi), expressed anxiety about the familiar scenario of prices rising before wages. Economic expert Dinh Trong Thinh warned of potential price hikes by late 2026 or early 2027, urging authorities to implement effective price stabilization measures. Experts emphasize that simply increasing wages is insufficient without accompanying measures. Dr. Vu Xuan Hung, an expert in education and human resource development, called for a synchronized approach involving the state, businesses, and workers. The state should focus on price stability and social welfare, businesses on optimizing benefits beyond minimum wages, and workers on financial management and self-improvement. He also highlighted the need for the government to strictly control prices of essential goods and penalize landlords who exploit the wage increase to raise rents unfairly. In the long term, promoting social housing and labor union facilities is seen as a sustainable way to indirectly increase workers' real income. Businesses are encouraged to enhance welfare packages, such as improving meal quality, providing transportation, or offering essential goods at wholesale prices. Focusing on skill development and performance-based bonuses can boost productivity and real income without increasing production costs. Professor Giang Thanh Long of the National Economics University advised workers to continuously learn and upgrade their skills to move into higher value-added positions.