PUBLIC SECTOR WAGE INCREASES: THE NEED TO ENSURE A DECENT STANDARD OF LIVING AND ALIGN WITH BUDGETARY CAPACITY

28 April, 2026

1. Background and Issues at Hand

During discussions on the socio-economic situation and the 2026 state budget, wage reform remains one of the key issues.

According to National Assembly deputies, the question now is no longer “whether to raise wages”, but rather by how much to ensure workers’ livelihoods while aligning with budgetary capacity and fostering development in the public sector.

PUBLIC SECTOR WAGE INCREASES: NEED TO ENSURE LIVING STANDARDS AND ALIGN WITH BUDGET CAPACITY

2. Wage increases are not just a technical issue

Adjusting the base wage is not merely a financial calculation; it has a direct impact on:

The livelihoods of civil servants and public employees;
Work motivation and workforce quality;
Operational efficiency of the state apparatus.

Therefore, wage policy should be viewed as a tool for public sector human resource management, not merely a social welfare policy.

3. Current Situation: Wages Do Not Meet the Minimum Living Standard

Despite multiple adjustments, the current base wage still has not kept pace with actual living costs.

Specifically:

A new civil servant earns approximately 4.7 million VND per month;
Meanwhile, the minimum cost of living in urban areas ranges from 6–7 million VND per month.

This gap leads to the following consequence:

Workers struggle to live independently on their wages;
They must rely on additional income;
Decreased work motivation and quality of life.

4. Proposal for a reasonable pay increase: Balancing life and budget

Some proposals suggest raising the base salary to approximately 2.65–2.70 million VND per month instead of the projected 2.53 million VND.

This level is assessed as:

A significant improvement in real income, particularly for low-income groups;
Does not place excessive pressure on the budget if accompanied by reforms to the administrative apparatus and expenditure structure;
Creates a “sense of a real wage increase,” rather than just a nominal one.

5. The Core Challenge: Balancing Three Key Factors

Wage policies must achieve a balance among three pillars:

Workers’ Livelihoods;
The state budget’s affordability;
Macroeconomic stability and administrative efficiency.

If there is a lack of balance, wage increases may:

Create fiscal pressure;
Or be insufficient to drive reform.

6. Policy Implications

Wage reform, if designed appropriately, will have many positive impacts:

Improving the quality of the public sector workforce;
Reducing reliance on income outside of salary;
Increasing competitiveness with the private sector;
Contribute to social stability and promote sustainable development.

View the full proposal here!

The upcoming public sector pay raise is not merely an income adjustment, but rather a comprehensive policy challenge involving the budget, human resources, and national governance efficiency.

The focus of reform should be on: real wage increases – ensuring a decent standard of living – linked to institutional reform and fiscal discipline, thereby creating long-term development momentum for the public sector.