Raising the minimum wage: Don't let prices erode incomes.
Speaking with reporters, Associate Professor Dr. Nguyen Thuong Lang, a senior lecturer at the National Economics University, commented that the proposed 9.8% increase in the minimum wage is more appropriate than the 8.5% increase in the current context.
However, for workers to truly benefit, it is crucial to maintain price stability and implement additional social welfare policies.
Even a nearly 10% increase is still unlikely to offset the price rise.
- The Vietnam General Confederation of Labor has proposed two options for increasing the regional minimum wage from January 1, 2027: 8.5% and 9.8%. What is your assessment of these two options?
From the perspective of workers, in the context of rising prices for many goods, everyone hopes for the highest possible wage adjustment to improve their income. Conversely, businesses always expect input costs, including labor costs, to remain reasonable in order to reduce pressure on production and business operations. These are different and perfectly understandable interests.
In my opinion, given the current Vietnamese labor market, adjusting the minimum wage is primarily aimed at partially offsetting the rising cost of living, rather than fully reflecting the value of labor as in developed labor markets.
Therefore, both the 8.5% and 9.8% increase options are valid. However, considering the current context, an increase of nearly 10% is more appropriate, contributing to improved income and reducing the pressure of living costs for workers.
- Following a 7.2% increase in the minimum wage starting in 2026, many believe the increase has not kept pace with the rising cost of living. If it continues to increase by 9.8% from 2027, will this gap be narrowed?
In recent times, many essential expenses such as electricity, energy, healthcare, housing, food, and transportation have increased, especially in Hanoi and Ho Chi Minh City. Therefore, the current adjustment to the minimum wage is still insufficient to fully compensate for the rising cost of living for workers.
However, when considered in relation to the current income levels and economic capacity of Vietnam, an increase of around 10% is reasonable and should be considered.
Vietnam has entered the group of upper-middle-income countries. If the goal is to maintain double-digit economic growth in the coming years, then workers' incomes also need to improve proportionally, thereby ensuring harmony between economic growth and social welfare.
- In your opinion, what factors should be prioritized when determining the minimum wage increase?
In my opinion, the most important factor remains the living standards of workers. The goal of adjusting the minimum wage is to ensure that real income is not eroded by inflation, thereby helping workers stabilize their lives.
When income improves, employees feel secure in their jobs, increase productivity, and remain committed to the company in the long term. Therefore, ensuring and increasing real income should be prioritized, thereby creating a foundation for improving labor productivity.
If the economy experiences high growth but workers' incomes do not increase proportionally, the benefits of growth will be difficult to distribute evenly, and the goal of sustainable development will be hard to achieve.
Maintaining stable prices and raising wages are what truly matter.
- If the proposed 9.8% increase is approved, how will workers benefit?
That also depends heavily on price movements.
If wages increase but the prices of electricity, gasoline, food, tuition, medical fees, etc., also rise simultaneously, then the nominal income of workers will be higher, but their real income will hardly improve.
Conversely, if prices remain stable, wage increases will be significantly more effective, providing workers with additional resources to cover essential needs and improve their quality of life.
Therefore, wage increases need to be accompanied by solutions to control inflation, stabilize prices, and enhance social security, such as subsidizing public transportation, healthcare, and education costs, or maintaining stable prices for essential goods. Only then will workers truly benefit from wage increases.
- In your opinion, is the current mechanism for adjusting the minimum wage appropriate?
In my opinion, the current adjustment mechanism is basically appropriate, especially when prices are relatively stable.
However, in the event of significant market fluctuations, it is not necessary to constantly adjust the minimum wage, as this could increase cost pressure on businesses and the economy. Instead, the government should adopt more flexible solutions such as price stabilization, subsidies for essential services, or direct support for workers.
In the long term, if Vietnam maintains a high growth rate for the next five years, I believe the goal of bringing the minimum wage closer to the minimum living standard for workers by around 2030 is entirely feasible.
Thank you, sir!