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RESOURCES Vietnam

Wage trends: Vietnam

Vietnam’s minimum wage has been revised four times since 2019. These changes by the Vietnamese government ensure that minimum wages for workers in the garment sector have increased steadily coming out of the COVID-19 pandemic. However, this report shows that the average monthly net wage for workers from FLA member companies shows a significant living wage gap of 22.4% (1,691,574 VND, or $69.70) in 2022.

As measured by FLA, average monthly net wages in Vietnam fluctuated, increasing significantly pre-pandemic, with a sharp decline in 2020 due to COVID-19. While there have been modest recoveries in 2021 and 2022, the average wage still lags behind pre-pandemic levels, indicating a persistent wage gap between 2019 and 2022.

The report stresses the need for continuous progress towards living wage and recommends that member companies:

  1. Work with their suppliers to ensure costing and purchase orders cover the new minimum wage in all applicable purchase orders; ensure the updated minimum wages and salary structures are included in costing considerations before July 1, 2024.
  2. Refer to the region-specific GLWC living wage estimates to support living wage targets for purchasing, costing, and suppliers.
  3. Create a level of trust with suppliers to ensure suppliers such that they can provide feedback to companies if purchase orders do not cover increased labor costs.
  4. Support suppliers and workers in improving social dialogue and collective bargaining by facilitating training and capacity building between management, supervisors, and workers on social dialogue incorporated in employment policies, the role of worker representative structures, and bargaining rights.
  5. Update supply chain wage data analysis and actions taken to implement their company’s fair compensation blueprint.
  6. Develop sustainable plans with their suppliers and production facilities to improve purchasing and production practices that support progress of workers’ wages to meet the GLWC estimates for Vietnam; plans should cover: long-term financial commitments that address closing the living wage gap; supporting worker representation in production, compensation, and employment; and investment in manufacturing and skills training to improve energy and labor efficiency.