Vietnam's minimum wage hike for 2027 debated: January or July start?

Vietnam's National Wage Council is set to hold its second meeting to negotiate proposed minimum wage increases for 2027. The Vietnam General Confederation of Labor (VGCL) maintains its proposal for two options: an 8.5% or 9.8% increase compared to 2026, effective January 1, 2027. The first option suggests an increase of 360,000 to 520,000 Vietnamese dong per month, averaging 9.8%. The second option proposes an increase of 315,000 to 450,000 dong per month, averaging 8.5%.

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Both my husband and I are factory workers. Our basic income of about 12-13 million dong per month per person is just enough for our family to get by, and that's without renting a house. To balance our expenses, we have to cut back as much as possible on entertainment, shopping, and non-essential dining out.

The VGCL's proposals are based on GDP growth, CPI, labor productivity, and factors impacting businesses. Workers and labor unions are eager for an early wage increase, as the prices of essential goods, living expenses, and education costs have significantly risen. "Both my husband and I are factory workers. Our basic income of about 12-13 million dong per month per person is just enough for our family to get by, and that's without renting a house. To balance our expenses, we have to cut back as much as possible on entertainment, shopping, and non-essential dining out," said Tran Phuong Ha, a worker at Sumitomo Heavy Industries.

Conversely, businesses are concerned about the proposed wage hikes. Hoang Quang Phong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), believes that a January 1, 2027, implementation is too soon for businesses to adapt. He suggests a July 1, 2027, start date. Nguyen Trong Nghia, CEO of StaBOO JSC, deems the proposed 9.8% increase excessively high, exceeding typical financial projections for manufacturing companies. "When building annual budgets, businesses usually cap labor cost increases at 4-5%. A nearly 10% wage hike would disrupt product cost calculations, especially since businesses cannot quickly raise output prices accordingly," Nghia stated.

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When building annual budgets, businesses usually cap labor cost increases at 4-5%. A nearly 10% wage hike would disrupt product cost calculations, especially since businesses cannot quickly raise output prices accordingly.

Nghia also pointed out that recent fluctuations in gasoline prices have increased input costs by 15-20%. He stressed the necessity of giving businesses more preparation time by delaying the implementation to July 1 to avoid potential losses or production scale reductions. "The increase must be compatible with businesses' payment capacity and forecast plans to ensure harmony and prevent companies from facing losses," he added.

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The increase must be compatible with businesses' payment capacity and forecast plans to ensure harmony and prevent companies from facing losses.