Vietnam’s National Wage Council agreed on a proposal last week to raise the minimum wage by region by an average of 15.1%. If the government approves it, rates will take effect from Jan. 1, 2015.
According to Thanh Nien News, the Wage Council recommended that the government raise monthly wages by 300,000 to 400,000 Vietnamese dong ($14-$18), and the proposal will be submitted to Prime Minister Nguyen Tan Dung for approval.
With the proposed increase, the new wage rate would range from 2.42 million to 3.1 million dong ($114-$146), depending on the region, up from 1.9 million to 2.7 million ($90-$128) earlier this year.
Deputy Minister of Labor, War Invalids and Social Affairs Pham Minh Huan has said the wage adjustments will be based on the country’s consumer price index (CPI), gross domestic product, overall wage increases and worker’s needs.
But despite the pending increase, Huan said the new wage levels will likely only meet 75 percent of the workers’ income needs, according to Vietnam Net. Living wages are still not being met and the increases still aren’t keeping up with the country’s high inflation—which is as much as four times higher than in neighboring countries. The Asia Development Bank forecast Vietnam’s inflation to hit 6.2% in 2014, much higher than Thailand’s 2.4%, Singapore’s 3 percent, Malaysia’s 3.2% and China’s 2.6%, Thanh Nien News reported.