Regional minimum wage increase of 7.2%: Not much increase in production costs for businesses

The Ministry of Home Affairs has just made a detailed assessment of the impact of increasing the average regional minimum wage by 7.2% from January 1, 2026.

Technical workers working at Hana Micron Vina Co., Ltd. factory ( Bac Ninh ) - Photo: GIANG SON DONG

The Ministry of Justice is reviewing a draft decree regulating minimum wages for employees working under labor contracts, chaired by the Ministry of Home Affairs.

Without an increase, the minimum wage would be about 6.6% lower than minimum needs.

Specifically, the Ministry of Home Affairs proposed to increase the regional minimum wage by 7.2% from January 1, 2026, in line with the recommendation of the National Wage Council, equivalent to VND250,000 - 350,000 per month depending on the region. With this increase, the minimum wage will be about 0.6% higher than the minimum living standard in 2026.

Specifically, region 1 is 5.31 million VND/month, region 2 is 4.73 million VND/month, region 3 is 4.14 million VND/month and region 4 is 3.7 million VND/month.

The minimum hourly wage is also adjusted to include region 1 at 25,500 VND/hour, region 2 at 22,700 VND/hour, region 3 at 20,000 VND/hour and region 4 at 17,800 VND/hour.

The Ministry of Home Affairs assessed that the minimum wage stipulated in Decree 74 no longer meets the minimum living standards of workers and their families.

Since 2024, the consumer price index (CPI) has increased steadily every year, causing the real value of the minimum wage to decline.

With CPI forecast to increase by 3.7% per year in 2025-2026, by the end of 2026, the minimum wage will be about 6.6% lower than the minimum need.

If the current minimum wage is kept, it will cause great difficulties for workers, increase the risk of labor disputes, discourage workers from improving labor productivity, and promote production and business development...

In particular, maintaining the current minimum wage can cause resentment among low-wage earners, potentially leading to labor disputes.

On the contrary, increasing wages helps workers have more income to cover their living expenses and stabilize labor relations when the economy grows well.

What impact will the minimum wage increase have?

In addition, the arrangement of administrative units at district and commune levels from July 1, 2025, the current minimum wage is linked to the locality of each district, after the boundary adjustment, many places have changed living standards so it needs to be updated.

Meanwhile, experts from the Ministry of Home Affairs said that if wages increase by 7.2%, the impact on production costs of enterprises will not be large. For example, the textile and footwear industry will increase by about 1.1% - 1.2%, a level that harmonizes the interests of workers and enterprises.

The minimum hourly wage is equivalent to the lowest wage paid for part-time work (restaurant, cafe, etc.). Therefore, it basically does not increase the cost or affordability of businesses (most pay the same or more).

The 7.2% average salary increase not only ensures a minimum living standard but also maintains the competitiveness of businesses, especially in the context of manufacturing and service industries needing stable human resources for development.

Therefore, the Ministry of Home Affairs proposed that the Government choose the option of increasing the regional minimum wage by 7.2% from January 1, 2026, and at the same time update the applicable areas to ensure balance in labor prices between neighboring areas, increase competitiveness in employment, attract workers, and promote local growth.

List of adjusted areas applying minimum wage:

- Change the name of Hoang Van Thu ward (Lang Son province) to Ky Lua ward;

- Adjust from zone 2 to zone 1 for wards (belonging to Hai Phong city): Chu Van An, Chi Linh, Tran Hung Dao, Nguyen Trai, Tran Nhan Tong, Le Dai Hanh, Kinh Mon, Nguyen Dai Nang, Tran Lieu, Bac An Phu, Pham Su Manh, Nhi Chieu and communes of Nam An Phu, Nam Sach, Thai Tan, Hop Tien, Tran Phu, An Phu, Cam Giang, Cam Giang, Tue Tinh, Mao Dien, Ke Sat, Binh Giang, Duong An, Thuong Hong, Gia Loc, Yet Kieu, Gia Phuc, Truong Tan, Tu Ky, Tan Ky, Dai Son, Chi Minh, Lac Phuong, Nguyen Giap, Nguyen Luong Bang, Phu Thai, Lai Khe, An Thanh, Kim Thanh.

- Adjust from zone 3 to zone 2 for Hoang Mai and Tan Minh wards (Nghe An province); Dong Ha and Nam Dong Ha wards (Quang Tri province); Phan Rang, Dong Hai, Ninh Chu, Bao An and Do Vinh wards and Thuan Bac and Cong Hai communes (Khanh Hoa province).

- Adjust from zone 3 to zone 2 for communes Thanh Ha, Ha Tay, Ha Bac, Ha Nam, Ha Dong, Ninh Giang, Vinh Lai, Khuc Thua Du, Tan An, Hong Chau, Thanh Mien, Bac Thanh Mien, Nam Thanh Mien, Hai Hung (Hai Phong city).

- Adjust from zone 4 to zone 3 for Quang Tri ward and communes Dong Le, Vinh Linh, Cua Tung, Ben Quan, Cua Viet, Gio Linh, Cam Lo, Khe Sanh, Lao Bao, Trieu Phong, Huong Hiep, Dien Sanh (Quang Tri province) and communes Ninh Son, Lam Son, Anh Dung, My Son, Thuan Nam, Ca Na, Phuoc Ha (Khanh Hoa province).

- Adjust from zone 1 to zone 4 for Ky Thuong and Luong Minh communes (Quang Ninh province).

- Adjust from zone 3 to zone 4 for communes of Thuong Trach, Truong Son, Kim Ngan (Quang Tri province).

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Source: https://tuoitre.vn/tang-luong-toi-thieu-vung-7-2-tang-chi-phi-san-xuat-cua-doanh-nghiep-khong-lon-20251002100119864.htm