World Bank: Vietnam’s private sector minimum wage is high, 58% of the median wage

A key benchmark of minimum wages is the relationship to median wages, and for Vietnam the picture differs sharply between the government and private sectors. Vietnam’s state sector wage is low by global and regional standards at around 30% of the median wage, while the private sector minimum wage is high, with the average ratio of minimum to median wage around 58%.

Vietnamese

15. By simple measures, the ratios of the minimum to mean and median wages, Vietnam’s private sector minimum wage is somewhat high relative to other countries. A key benchmark of minimum wages is the relationship to median wages, and for Vietnam the picture differs sharply between the government and private sectors. Figure 14 depicts the ratios of minimum to average and median wages in Vietnam and selected countries in the OECD and EAP (click on the image to zoom in). The private sector minimum wage and the government sector reference wage are shown separately. Vietnam’s state sector wage is low by global and regional standards at around 30% of the median wage, while the private sector minimum wage is high, with the average ratio of minimum to median wage around 58%.

So does that mean the median private sector wage in Region 1 will increase from 5,344,828 vnd/month  in 2015 to 6,034,483 vnd/month in 2016? ( = 3,100,000 / 0.58 and 3,500,000 / 0.58, respectively).

Sources:

Taking Stock: An Update on Vietnam’s Recent Economic Developments; Section II – Special Focus on Labour Market: Building Modern Labour Market Regulations and Institutions in Vietnam, July 2015, World Bank Vietnam Representative Office, pp 35, 36, 37

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