The minimum wage will increase by 7.3 per cent in 2017, a National Wage Council meeting on August 2 in northern Vinh Phuc province has decided.

Prior to the meeting the Vietnam Chamber of Commerce and Industry (VCCI) suggested the increase be from 4.5 to 5 per cent but then accepted a 6 per cent increase.

A textile company member even recommended the minimum wage not be increased in 2017.

The Vietnam General Confederation of Labor (VGCL), meanwhile, agreed to reduce its suggested increase down to 10 per cent from the previous 11.11 per cent.

The National Wage Council then voted and passed a plan to increase the minimum salary by 7.3 per cent in 2017. Thirteen of the 14 members of the council agreed.

The minimum wage in Region I will increase VND250,000 ($11.2), or 7.1 per cent, in Region II VND220,000 ($9.86), or 7.1 per cent, in Region III VND200,000 ($8.9), or 7.4 per cent, and in Region IV VND180,000 ($7.9), or 7.9 per cent.

The average increase for the four regions is VND213,000 ($9.5), or 7.3 per cent.

Mr. Pham Minh Huan, Deputy Minister of Labor, Invalids and Social Affairs, said that after researching factors such as the CPI and the circumstances of enterprises, VCCI and the VGCL agreed to the 7.3 per cent increase.

Talking with local media, Mr. Mai Duc Chinh, Vice Chairman of the VGCL, said the minimum wage meets just 85 per cent of living costs.

He emphasized that plans to increase the minimum wage in 2018 should see it reach a figure that covers minimum living costs.

He pointed out that Article 91 of the Labor Law states that the minimum wage must cover minimum living costs.

Three years after it came into effect, however, this is still not the case. All articles in the law, he said, should be fully implemented.

Last year the minimum wage increase for 2016 triggered much disagreement. The differences in initial proposals from VCCI and VGCL were significant, as VCCI proposed 10 per cent and VGCL 14.3 per cent.

After two meetings in September 2015 the parties had not found common ground. Deputy Minister Huan announced at that time that as Chairman of the National Wage Council he would decide the final figure if a third meeting failed to find agreement.

At that third meeting, in September 2015, the parties agreed that the 2016 minimum wage increase would be 12.4 per cent.