Viet Nam: Strengthening tripartite dialogue and data-driven wage policies

Like many nations worldwide, Viet Nam has faced significant economic challenges brought on by the COVID-19 pandemic and inflationary pressures. These factors have heavily influenced wage-setting, with the minimum wage remaining unchanged for an extended period. The Setting Adequate Wage (SAW) project has played a significant supporting role in keeping the country’s wage updated, fostering tripartite dialogue and implementing data-driven decisions for more transparent and equitable wage adjustments. This support has helped the National Wage Council (NWC) navigate complex wage-setting challenges, leading to a 6% increase in the minimum wage in 2024.

A collaborative, evidence-based approach at the national level

A key achievement of the ILO SAW project in Viet Nam has been supporting the strengthening of the tripartite dialogue on wages between the government, workers and employers. The project created new opportunities for the tripartite constituents to engage in meaningful discussions on wage adjustments using reliable data and comparable information. The project also co-hosted NWC meetings attended by high-level national experts to address the challenges and discuss options to move towards an adequate minimum wage setting mechanism. Upon the request of the NWC, the ILO SAW project provided technical inputs and policy briefs outlining inflation responses in neighboring countries and prepared presentations for the NWC meetings. This collaboration has enabled Viet Nam to align minimum wage increases with regional trends, remaining competitive while ensuring workers' wages are responsive to both their needs and the economic landscape.

The technical support provided by ILO SAW project proved instrumental in helping the council navigate complex technical decisions, such as balancing wage increases with inflation and maintaining employment levels​. By reinforcing collaborative and data-driven decision-making, the ILO SAW project has contributed to the transformation of wage-setting processes in Viet Nam, making them more evidence-based and equitable.

Assessing the impact of minimum wage adjustments in Viet Nam

Continuing efforts to support informed decision-making by the National Wage Council (NWC), a crucial next step has been to assess the impact of these minimum wage adjustments quantitatively and qualitatively. By providing data-driven insights that have enabled Viet Nam to align wage increases with inflation and regional trends, the project has helped Viet Nam align wage increases with inflation and regional trends, contributing to a more responsive wage-setting process. However, understanding the broader implications of these adjustments requires comprehensive analysis.

The impact assessment aims to provide evidence on the effect of minimum wage adjustments on employment and the social outcomes of target beneficiaries over the last ten years. Through targeted impact assessments, the ILO SAW project is evaluating how recent adjustments to the minimum wage affect workers across various demographics–including the gender aspects of current minimum wage systems, industries and regions. The research scope covers all four minimum wage zones with some selected provinces in the north and south of Viet Nam. Besides the overall analysis of all waged workers, it focuses on the export-oriented manufacturing industries, which are drivers of wage growth countrywide. This research is essential for identifying both the benefits and potential areas for improvement within the minimum wage system.

For example, by examining how adjustments have influenced purchasing power and worker satisfaction, the project aims to provide the NWC with insights that ensure wage policies are not only fair but also sustainable in the long term. Research results will equip the NWC with data-driven insights necessary to review the minimum wage-setting mechanism, offering a solid foundation for future adjustments. The findings will directly inform the minimum wage adjustment process set for 2025, ensuring that the system continues to reflect the evolving needs of workers and economic conditions.

The assessment process is also instrumental in reinforcing compliance with minimum wage regulations. By shedding light on compliance gaps and the specific challenges faced by different sectors, the ILO SAW project facilitates constructive dialogue between the government, employers and workers. This collaborative approach helps stakeholders identify targeted solutions for improving adherence to minimum wage policies, fostering a culture of accountability and fairness.

Conclusion: Reinforcing Social Dialogue and Data-Driven Wage Reform

The SAW project has contributed to Viet Nam’s ongoing efforts to strengthen tripartite dialogue and embed data-driven decision-making at the heart of wage-setting processes. With its contributions to the National Wage Council and its role in fostering evidence-based discussions, the project has supported the adjustment of the minimum wage and, in turn, helped navigate the complexities of post-pandemic recovery and inflationary pressures.

A key aspect of this initiative is the impact assessment of the minimum wage system, which provides essential feedback on how these adjustments affect labour market outcomes of workers across various sectors and demographics. By systematically evaluating the outcomes of wage changes, the support from ILO SAW project provided substantial support to the National Wage Council to refine wage-setting policies, ensuring they are grounded in robust data and responsive to evolving economic conditions. This continuous improvement process reinforces the effectiveness of the minimum wage system in Viet Nam, supporting its long-term sustainability.

Through continued collaboration and the use of reliable data, Viet Nam is well-positioned to develop fair and equitable wage policies that reflect the needs of workers and their families, as well as economic factors, and align with the principles of social justice championed by the ILO.