Projected After Wage Reform: Will Salaries Increase by 5% to 7% Annually? What Are the Goals of Wage Reform by 2030?
Expected Salary Increase by 5% to 7% Annually After Wage Reform?
At the 8th regular meeting of the Government of Vietnam in September 2023, it was discussed that wage reform would be implemented as follows: "In recent years, amidst the dual challenges of combating and mitigating the consequences of the COVID-19 pandemic while ensuring social security, we have still managed to save VND 500 trillion to prepare for wage reform in 2024, 2025, and 2026 according to Resolution 27-NQ/TW of 2018 of the 12th Central Committee."
At the 8th Conference of the 13th Central Committee, the General Secretary emphasized that the Central Committee would consider the actual situation, challenges, and inadequacies being faced to propose development viewpoints, guiding ideology, general objectives, some basic, important indicators, and main tasks and solutions to implement the new wage policies starting from July 1, 2024.
Recently, at a meeting with the voters, the Chairman of the National Assembly underscored the principle of wage policy reform, which is that the new wage must not be lower than the current wage. It is expected that after 2024, wages will increase by 5-7% annually, aiming for public sector wages to match those in the production sector in the short term.
Is it expected that after wage reform, wages will increase by 5% to 7% annually? What is the target of the wage reform by 2030?
Is Wage Reform an Important National Policy?
According to the spirit of Resolution 27-NQ/TW of 2018, the significance of the wage reform policy is as follows:
- Wage policy is a particularly important component of the socio-economic policy system, directly related to major economic balances, the labor market, and the livelihood of wage earners, contributing to building a streamlined, clean political system that operates effectively and efficiently, preventing corruption and waste.
- Wage policy is a particularly important policy of the socioeconomic policy system.
Wages must genuinely be: The main source of income ensuring the livelihood of workers and their families; proper wage payment is an investment in human resource development, providing motivation to increase labor productivity and work efficiency, contributing importantly to social progress and equality, ensuring political and social stability; promoting, enhancing growth quality, and sustainable development.
- Wage policy reform must ensure comprehensiveness, systematicness, synchronization, continuity, and effectively address the limitations and inadequacies of the current wage policy; comply with the principle of distribution according to labor and the objective laws of the market economy, using labor productivity increases as the basis for wage growth; meet international integration requirements; have an appropriate roadmap according to the country's socioeconomic development conditions and resources.
What is the Goal of Wage Reform by 2030?
According to subsection 2.2, subitem 2, Section 2 of Resolution 27-NQ/TW of 2018 on specific goals:
For the public sector
- From 2021, apply the new unified wage policies for officials and public employees and armed forces across the entire political system.
- In 2021, the minimum wage for officials and public employees will be equal to the average minimum wage of the enterprise sector.
- Periodically raise wages in line with the consumer price index, economic growth rate, and the state budget's capability.
- By 2025, the minimum wage for officials and public employees will be higher than the average minimum wage of the enterprise sector.
- By 2030, the minimum wage for officials and public employees will be equal to or higher than the highest regional minimum wage of the enterprise sector.
For the enterprise sector
- From 2021, the State will periodically adjust regional minimum wages based on recommendations from the National Wage Council. Enterprises will implement wage policies based on negotiations and agreements between employers, employees, and collective labor representatives; the State will not directly interfere with enterprise wage policies.
- Manage labor and wages in state-owned enterprises by associating wage cost contracting with business tasks until 2025 and moving towards business task contracting by 2030.
Thus, the goal by 2023, after the wage reform, is: The lowest wages for officials and public employees and armed forces will be equal to or higher than the highest regional minimum wage of the enterprise sector.
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