Vietnam: Labor unions propose 9.8% minimum wage hike for 2027

Vietnam's General Confederation of Labor (VGCL) has proposed two scenarios for increasing the regional minimum wage in 2027, suggesting hikes of 8.5% and 9.8% respectively. These proposed adjustments, which would take effect on January 1, 2027, are based on factors including GDP growth, the consumer price index, and labor productivity.

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The current minimum wage is falling behind the actual cost of living. The proposed increase is relatively appropriate to ensure a basic standard of living for workers.

According to Tran Thi Thanh Ha, Deputy Head of the Labor Relations Department at VGCL, the current minimum wage is falling behind the actual cost of living. She stated that the proposed increases are intended to ensure a basic standard of living for workers. Ha also noted that 40% of businesses have maintained their growth rate, and 24% plan to expand production, suggesting some capacity for wage adjustments.

However, business representatives, including Hoang Quang Phong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), have voiced concerns about the proposed timeline. Phong suggested that an effective date of January 1, 2027, would be too soon for businesses to adapt. The VCCI prefers a July 1, 2027, implementation date and is currently surveying its members to formulate an official proposal.

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If the adjustment is made from January 1, 2027, it will be too rushed, not enough time for the business community to adapt. Therefore, the time of increase that businesses want is July 1, 2027.

Phong emphasized the need for a balance between workers' needs and businesses' ability to afford increases, especially given current economic challenges such as tax burdens and labor costs. He noted that some industries, like textiles and footwear, operate on thin profit margins, making significant wage hikes difficult. The National Wage Council will convene to thoroughly discuss the adjustment timing and appropriate rates.

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Businesses are facing difficulties due to the tax situation, the labor situation... If wages are adjusted too high, costs will increase, so we must balance interests.