It believes that with the minimum wage hike, workers will gain additional income, while businesses face only a slight increase in production costs.

According to the proposal, from January 1, 2026, the minimum monthly wages in each region would increase as follows:

Region I: from VND4.96 million to VND5.31 million

Region II: from VND4.41 million to VND4.73 million

Region III: from VND3.86 million to VND4.14 million

Region IV: from VND3.45 million to VND3.7 million

This translates to an increase of VND250,000–350,000 per month, or an average of 7.2 percent.

According to the Ministry’s impact assessment report, with a 7.2 percent increase, the regional minimum wage would be about 0.6 percent higher than the predicted minimum living standard in 2026. This means that workers would benefit immediately from the start of the year, as the adjustment anticipates part of the expected rise in the consumer price index (CPI).

Raising the minimum wage not only increases income but also serves as a tool to ensure social security, helping workers afford essential needs amid rising living costs.

This is a key factor in maintaining workforce stability and encouraging workers to participate fully in social insurance and health insurance schemes.

It is estimated that a 7.2 percent increase in the minimum wage would only raise average production costs by 0.5–0.6 percent. Labor-intensive industries such as textiles and footwear may see a higher increase of around 1.1-1.2 percent. However, this is still considered a manageable level that would not cause major disruptions to business operations.

Notably, most businesses already pay wages above the minimum level. Therefore, the actual impact will mainly affect workers currently earning below the new minimum, whose wages will need to be adjusted accordingly. The main cost increase for businesses will come from the associated rise in mandatory insurance contributions linked to wages.

The Ministry states this approach ensures workers’ living standards improve while businesses maintain stable production and recover from challenging times. The policy is seen as a balanced sharing of benefits, with neither side bearing excessive pressure.

Increase without disruption

In addition to monthly wages, the Ministry also proposed adjusting the hourly minimum wage from 2026 to ensure consistency. The proposed minimum hourly wages are:

Region I: VND25,500

Region II: VND22,700

Region III: VND20,000

Region IV: VND17,800

Currently, these rates are:

Region I: VND23,800

Region II: VND21,200

Region III: VND18,600

Region IV: VND16,600

These minimum hourly rates are the legal floors for employment agreements in flexible or part-time work arrangements. Currently, they are roughly on par with the lowest wages paid to part-time workers in restaurants, cafes, and similar jobs.

In reality, most businesses already pay at or above these levels, so the proposed increase would not significantly raise their labor costs.

For workers, especially part-time employees, raising the hourly minimum wage enhances legal protection and formal recognition of their rights. In addition, standardizing the conversion between monthly and hourly wages helps prevent businesses from exploiting pay structure changes to circumvent wage policies. As a result, labor relations and pay stability can be better maintained.

Balancing benefits, enhancing workforce quality

Adjusting the minimum wage carries significant social impact. Higher wages motivate workers to stay with employers, while reducing wage-related conflicts, a primary cause of collective disputes and strikes.

The increase fosters harmonious, stable, and progressive labor relations, a critical factor for maintaining social order, especially as the labor market needs stability for sustainable growth.

A labor and wage expert noted that this adjustment reflects efforts to balance benefits between workers and businesses. The harmonized wage increase encourages labor restructuring, motivating businesses to boost productivity and invest in technology to optimize costs.

“In the long term, the minimum wage policy also enhances workforce quality, making Vietnam’s labor market more competitive regionally. Improved living standards allow workers to restore their energy and commit long-term to employers, driving sustainable socio-economic development,” the expert said.

Nguyen Le