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[Research Contribution] Wage or Survival Fee? A New Perspective on Provincial Minimum Living Wages in Vietnam

27 December, 2025

Keywords: Living Wage; Provincial-level Wage; Anker Methodology; Living Wage in Vietnam; Cost of Living Differences.

Amidst rapid urbanization and significant disparities in living standards across provinces, many Vietnamese workers, particularly factory and manual laborers, are struggling to cover basic living costs with their current wages. They are forced to work overtime, even at the expense of their health, forgoing educational opportunities and living in unhealthy environments just to get by. In response to this reality, a research team from the University of Economics Ho Chi Minh City (UEH) has proposed a method for determining provincial-level minimum living wages, providing a scientific basis for more reality-based wage policies.

With the current minimum wage, many workers cannot afford three nutritious meals a day, let alone rent, school fees for their children, or medical expenses. They must work overtime, often sacrificing their health and time with their families, simply to survive in the city.

According to data from the Institute of Workers and Trade Unions (2019), in 2018, 99% of workers in Vietnam earned less than the standard set by the Asia Floor Wage Alliance (AFWA), and 74% earned less than the standard of the Global Living Wage Coalition (GLWC). By the end of 2022, a survey by the Vietnam General Confederation of Labour across 16 provinces found that 66% of workers expressed a desire for a basic salary increase (Vietnam General Confederation of Labour, 2023). The situation had not improved by 2023: 75.5% of workers reported that their income was insufficient to cover living expenses, with some cases where it covered only 45% of their consumption needs (Trade Union, 2023).

Furthermore, basic salary accounts for only 76.7% of income, with the remainder coming from overtime and other allowances from employers. These figures clearly reflect the urgent need for a living wage, not just for subsistence but to ensure a stable life and the ability to save for the future (Trade Union, 2023).

In Vietnam, research on minimum living wages is still in its early stages, with a focus on policy. Consequently, approaching this issue at the provincial level—where living conditions and costs can vary greatly—has not been fully explored. Motivated by this reality, this paper aims to measure the minimum living wage at the provincial level in Vietnam by applying a modified Anker methodology, using data from the 2022 Vietnam Household Living Standards Survey (VHLSS 2022).

What is a Living Wage?

A living wage is the income a worker needs to ensure a basic standard of living for their family, including food, housing, healthcare, education, transportation, and a small amount of savings for emergencies.

A New Approach – From Region to Province

While most current wage research and policies in Vietnam are still based on a four-region minimum wage division, this study takes a significant step forward: it calculates a minimum living wage for each individual province.

Instead of applying a single rate to a large region—where there are considerable differences in the cost of living between provinces—the research team proposes a province-level approach to more accurately reflect the reality and specific spending needs of workers in each locality.

The breakthroughs of this method lie in:

Selecting a reference household at the median expenditure level, which better reflects the common standard of living compared to previous approaches that used a lower expenditure group (the fourth decile).
Differentiating between rural and urban areas within each province, rather than grouping them as in the four-region model.
Utilizing existing data from the Vietnam Household Living Standards Survey (VHLSS 2022), which saves costs and is suitable for a context of constantly changing prices.

Based on the Anker methodology framework, this approach calculates the living wage by aggregating four essential cost groups:

A representative household at the median expenditure level, with a rural-urban disaggregation.
Food costs based on median prices and a nutritional diet of 2,260–2,375 calories/person/day, depending on the region.
Housing costs based on a standard area of 40m²/household, supplemented with factors like electricity, water, and fuel.
Non-food, non-housing (NFNH) costs estimated from actual expenditure ratios, then adjusted for healthcare, education, and transportation.

The result is a detailed picture of the necessary standard of living in 63 provinces, accurately reflecting the cost-of-living differences between regions.

Research Findings – A Comprehensive Picture of Living Wages in Vietnam

The research results show a significant variation in the minimum living wage across Vietnam’s 63 provinces, ranging from 5.7 million to 12.9 million VND/person/month. Hanoi has the highest living wage (12.901 million VND), followed by HCMC and Da Nang—economic centers with high living costs. Conversely, provinces such as Hau Giang, Lai Chau, and Ha Giang recorded the lowest levels, below 6.3 million VND.

In 62 out of 63 provinces (excluding Thanh Hoa), the actual average wage is lower than the minimum living wage. This indicates that the majority of workers have not yet achieved an income level that can guarantee a basic standard of living for themselves and their families.

Meanwhile, the minimum wage for Region I—the highest under the current policy framework—is only 36–38% of the minimum living wage in Hanoi and HCMC.

Converted to Purchasing Power Parity (PPP), the living wage in Hanoi is 1,709 PPP$, higher than the Vietnamese average according to the Asia Floor Wage Alliance standard (1,675 PPP$) and comparable to major cities like Beijing (China) or Colombo (Sri Lanka).

Conclusion

Developing a wage system that aligns with current economic conditions not only improves the lives of workers but also motivates them to work more effectively, thereby contributing to the growth of businesses and the economy as a whole. This study proposes a more suitable method for calculating the minimum living wage at the provincial level, ensuring it meets the needs of a standard family of two adults and two children.

The minimum living wage in most provinces is higher than the average wage, indicating that current wages are insufficient to meet the basic living needs of workers, especially in provinces with low labor productivity. In major cities like Hanoi, HCMC, and Da Nang, the minimum living wage is significantly higher than in deep rural areas. However, some provinces like Hai Phong and Ha Tinh have high living wages despite not being major metropolises, suggesting a trend of industrialization and economic development in areas outside the central cities, which increases labor demand and living costs.

Furthermore, the research findings will serve as a basis for proposing mechanisms to adjust wage policies to be more aligned with reality and to support the stability of workers’ lives.

Authors: Assoc. Prof. Dr. Vo Tat Thang, Prof. Dr. Nguyen Dong Phong, Prof. Dr. Nguyen Thien Nhan, and Truong Thi Kieu Nhung – University of Economics Ho Chi Minh City

This article is part of the series spreading research and applied knowledge from UEH with the message “Research Contribution For All.” UEH cordially invites readers to look forward to the next UEH Research Insights newsletter.

News, photos: Authors, UEH Department of Communications and Partnerships

Chân Trang (1)