Minimum wage to increase from 2024

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Labor-Social Securities

The Vietnamese government is planning to discuss the possibility of increasing the minimum wage for 2024 in early August. The current minimum wage is 4.68 million dong (US$204) per month in the highest-paid region, and 3.25 million dong (US$137) per month in the lowest-paid region. The government will consider factors such as the cost of living, inflation, and the ability of businesses to pay higher wages before making a decision. The minimum wage in Vietnam has been increased every year since 2016. In 2023, the minimum wage was increased by 6%. However, the cost of living has also been rising, and many workers are struggling to make ends meet. Inflation in Vietnam was 4.17% in 2022, and it is expected to be around 4% in 2023. This means that the value of the minimum wage is actually decreasing in real terms. The government is under pressure from workers’ unions to increase the minimum wage more significantly in 2024. The Vietnam General Confederation of Labour (VGCL) has proposed an increase of 15% to 20%. However, businesses are concerned that a large increase in the minimum wage would make it difficult for them to stay profitable. The government will need to balance the needs of workers and businesses when making a decision on the minimum wage for 2024. It is also important to consider the impact of the minimum wage on inflation. If the minimum wage is increased too much, it could lead to a spiral of rising prices and wages. The government is expected to announce its decision on the minimum wage for 2024 in September. In the meantime, workers and businesses will continue to lobby for their respective interests. The outcome of the decision will have a significant impact on the lives of millions of people in Vietnam. In addition to the factors mentioned above, the government will also consider the following when making a decision on the minimum wage for 2024:
  • The level of economic growth. If the economy is growing rapidly, the government may be more willing to increase the minimum wage.
  • The unemployment rate. If the unemployment rate is high, the government may be more cautious about increasing the minimum wage, as this could lead to job losses.
  • The political climate. If there is a lot of social unrest, the government may be more likely to increase the minimum wage in order to appease workers.
The decision on the minimum wage for 2024 is a complex one, and there is no easy answer. The government will need to carefully consider all of the factors involved before making a decision.
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