Wages have yet to keep pace with living costs
For many workers, monthly wages are divided among essential expenses such as food, rent, electricity and water, transport, childcare, and supporting their families. An unexpected medical bill or the start of a new school year for their children can be enough to disrupt an already tight household budget. In these circumstances, working overtime becomes a way to supplement income, while saving remains a difficult goal to achieve.
One example is Le Thu Ha, who has worked at Dong Anh Industrial Park in Ha Noi for four years on a basic salary of around 5.8 million VND per month. With overtime and allowances, her income can reach 15–16 million VND. However, in months when there is little overtime work, she receives only around 8 million VND.
For workers like Ha, rent, electricity and water bills, and transport costs are difficult expenses to reduce. Those with young children must also cover school fees, food, and childcare costs. Meanwhile, income from overtime depends on businesses’ orders and production plans. Wages may rise in months when there is plenty of work but fall when production slows.
According to Ngo Duy Hieu, Vice President of the Viet Nam General Confederation of Labour, relying too heavily on overtime is not a sustainable solution. Workers may improve their immediate income, but it comes at the cost of time for rest, family care, and health recovery. If basic wages are insufficient to meet essential needs, they also have little opportunity to undertake vocational training or improve their qualifications to enhance their employment prospects.
Income pressures also affect access to essential services. According to a survey by the Viet Nam General Confederation of Labour, 55.5% of respondents said their wages covered only a portion of their children’s education expenses; 46.1% said their income was sufficient to buy only some basic medicines, while 2.9% could not afford medicines or medical examinations and treatment at all.
These difficulties show that wages are directly linked to quality of life and the ability to secure social protection. When most of their income is spent on immediate needs, workers find it difficult to save for health emergencies, unemployment, or retirement.
In the public sector, the need to improve incomes has also emerged amid efforts to reform the organisational apparatus and improve the quality of public services. On March 9, 2026, Deputy Prime Minister Pham Thi Thanh Tra said that the statutory pay rate had increased by around 58% through successive adjustments but remained low compared with practical requirements and workers’ living standards. This highlights the need to combine pay rises with reforms to wage-setting mechanisms and the management and assessment of human resources.
Reform driven by practical needs
On October 21, 2026, Deputy Prime Minister Pham Thi Thanh Tra said the government was preparing a proposal to report to the Politburo, with plans to submit it to the 5th Plenum of the Party Central Committee for consideration of a new resolution on wage and social insurance policies, replacing Resolutions No. 27-NQ/TW and No. 28-NQ/TW issued in 2018.
The preparation of a new resolution reflects the need to review shortcomings that have emerged during the implementation of wage and social insurance policies. However, the process is still at the proposal-development stage, and specific provisions remain subject to decisions by the competent authorities.
Resolution No. 27-NQ/TW set out orientations for wage reform, including the development of new salary scales linked to job positions, titles, and leadership positions. Adjustments to wage levels in recent years have helped improve incomes, however, issues concerning pay relativities, payment methods, and performance assessment still need to be addressed.
From a social security perspective, the requirement is not simply to raise nominal wages but also to improve real incomes. A pay rise is unlikely to bring about a clear improvement if living costs increase rapidly or workers still require overtime work just to make ends meet. Therefore, policymaking needs to take into account workers’ ability to meet essential needs, save money, and secure their livelihoods.
In the business sector, the regional minimum wage is an important instrument for protecting low-income workers. On July 16, 2026, the National Wage Council agreed on a plan to raise the regional minimum wage by an average of 7.8% from January 1, 2027, for submission to the government for consideration. Under the proposal, the monthly minimum wage would rise to 5.7 million VND in Region I, 5.08 million VND in Region II, 4.45 million VND in Region III, and 4.04 million VND in Region IV.
Adjusting the minimum wage has a direct impact on low-paid workers. However, the minimum wage should not become the prevailing income level over the long term, regardless of whether workers have gained experience, improved their skills, or taken on greater responsibilities. Income should reflect workers’ qualifications, capabilities, and contributions.
Linking wages to productivity and long-term social security
In the public sector, job-position-based reform aims to establish a pay mechanism that better reflects professional requirements, responsibilities, and work performance. To achieve this, Nguyen Tien Dinh, former Deputy Minister of Home Affairs, said it was first necessary to clearly define the duties, competency requirements, and expected outputs of each position, while developing transparent assessment criteria suited to the characteristics of each field.
Pay based on performance does not mean assessing workers solely by the number of products or files completed. For teachers, doctors, and those working in community services, work quality is also reflected in professional responsibility and the effectiveness of the services they provide. If assessments are not objective, the new mechanism may fail to achieve its goals of fairness and motivation.
In the business sector, Assoc Prof, Dr Dinh Trong Thinh, an economic expert at the Academy of Finance, said wage improvements needed to be linked to higher productivity, better job quality, and career development opportunities. Businesses can invest in technology, improve processes, train workers, and organise production more efficiently to create room for income growth. Workers who enhance their skills will also be better placed to take on higher-value jobs, improve their earnings, and strengthen their bargaining power.
More importantly, excessive dependence on overtime as a source of income needs to be reduced. When basic wages improve, workers have more time to rest, care for their families, and pursue further training. Businesses also have an opportunity to stabilise their workforce, reduce recruitment and replacement costs, and improve production and business efficiency.
Wages are also directly linked to participation in social insurance and the ability to secure a livelihood when workers fall ill, lose their jobs, or reach retirement age. Therefore, the development of a new resolution on wages and social insurance needs to be considered in a coordinated manner, avoiding a situation in which immediate income improvements are prioritised without sufficient attention to long-term benefits.
At a working session with the Ministry of Home Affairs on September 22, 2026, Deputy Prime Minister Pham Thi Thanh Tra called for a comprehensive assessment of the implementation of the resolutions and for wage and social insurance policies to be calculated as part of an overall framework, with due attention to the ability to balance funds and ensure sustainability.
For workers, this means that today’s income must go hand in hand with protection when risks arise. Full participation in social insurance, broader coverage, and measures to enable workers without stable employment to join the social security system should be pursued alongside wage reform.
At the same time, pay rises must be backed by the resources needed to implement them. Income adjustments need to take into account economic growth, labour productivity, the State budget balance, and businesses’ ability to pay. If wages rise but the prices of goods and services increase at a corresponding rate, the real benefits for wage earners will be eroded.
According to the announced plan, the proposal on wage and social insurance policy reform is expected to be finalised in January 2027, submitted to the Political Bureau and the Party Central Committee's Secretariat in February 2027, and presented to the Party Central Committee at its 5th Plenum in March 2027.
