Regional minimum wage set to increase by 5.5 percent in 2020

ABO/VNA – The regional monthly minimum wage will increase by 5.5 percent from January 1, 2020 after representatives of the State, employers and employees reached consensus at their second round of negotiations on July 11.

Illustrative image (Source: internet)

Accordingly, minimum wage for workers in Region I, which covers urban areas of Hanoi and Ho Chi Minh City, is set to rise to 4.42 million VND (190.5 USD) while workers in Region II – covering rural areas of Hanoi and HCM City, along with major urban areas in the country like Can Tho, Da Nang, and Hai Phong, will earn 3.92 million VND (169 USD).

Those in Region III, or provincial cities and the districts of Bac Ninh, Bac Giang and Hai Duong provinces, will make at least 3.43 million VND (148 USD) a month, while Region IV, or the rest of the country, will make 3.07 million VND (132.5 USD).

The National Wage Council comprising 15 members – split evenly between the Ministry of Labour, Invalids and Social Affairs (MOLISA), representing the State, the Vietnam Chamber of Commerce and Industry (VCCI), representing the employers, and the Vietnam General Confederation of Labour (VGCL), representing the employees – holds meetings every year to debate the regional minimum wage for the next year.

Deputy Minister of Labour, Invalids and Social Affairs Doan Mau Diep said the current minimum wage has met 95 percent of the labour force’s minimum living standards so the raise would make their lives more comfortable.

The MOLISA presented three schemes: increasing the minimum wage by 4.9 percent, 4 percent or 6 percent.

The VCCI argued that since the minimum wage has already met 95 percent of the basic living demands, there’s no need for any further increase to the workers’ wage in 2020.

It said if there should be an increase, the rate should be kept at 1-2 percent, because boosting minimum wage would increase businesses’ expenditures and hurt their performance, but the organisation said it acknowledged the calls for higher minimum wage from the State and from employees given robust economic growth in recent years.

VCCI Vice Chairman Hoang Quang Phong said this result “will not bring any smile to the business community but we are sympathetic and willing to share the workers’ difficulties.”

The VGCL said that though the final result fell short of its hopes for a more than 6 percent increase, 5.5 percent serves as a “middle ground” most of the council members could agree upon.

Minimum wage in Vietnam has been rising for the last three years, with year-on-year increases of 7.3 percent, 6.5 percent and 5.3 percent in 2017, 2018, and 2019, respectively.

(Source: VNA)