Civil servants fear wage hike may not keep pace with rising prices as costs move ahead of policy

The Ministry of Interior has proposed raising the base salary to 2.53 million dong from July 1 this year, an increase of about 8%, drawing attention from many workers. While salaries have not yet risen, prices have already started to move higher in advance, leaving some employees concerned that the cost-of-living increase could offset the wage gain.

Workers weigh wage increase against rising living costs

Le Van Son, a civil servant in Hanoi, said his current income is around 15 million dong per month. If the salary adjustment is implemented, he expects an increase of more than 1 million dong each month. “It sounds heartening, but honestly I don’t know whether to be happy or worried,” he said, adding that the cost of living has begun to rise before the policy takes effect.

According to Son, gasoline price increases over the past few weeks have lifted broader costs. He cited price rises ranging from breakfast to meals such as pho, with costs increasing by 5,000–10,000 dong. He also noted higher prices for vegetables, groceries, and transportation.

“Cumulatively, the additional expenditure may even exceed the salary increase,” Son said.

Hospital employee says wage gains may be hard to offset

Le Thi Nga, who works at a hospital in Hanoi, said the proposed 8% salary increase would add nearly 1 million dong per month. However, she said it would be difficult to offset the pace of price growth. “Gas prices rising pull up everything—from meals to transport and daily living costs,” she said.

Policy intent and the challenge of timing

The article notes that adjustments to pensions and allowances are necessary to improve living standards, particularly for low-income groups and vulnerable people. However, it argues that the issue is not only the size of the increase, but also price controls and the lag between policy changes and market prices.

If prices continue to rise ahead of wage adjustments, the effectiveness of income growth could be limited.

Expert view: wage policy must align with inflation control

Experts emphasized that wage policy cannot be separated from macroeconomic management, especially inflation control. They said that to ensure people truly benefit from wage increases, authorities need to maintain macroeconomic stability and keep inflation under control, while also promoting competition, production expansion, and supply increases to ease price pressures.

They also pointed to the importance of improving market supply to reduce the tendency for prices to “follow the crowd.” In addition, the article says price stabilization programs, promotions, and consumer stimulus should be intensified, especially for essential goods.

Expected outcome if prices are kept stable

“If these measures are properly implemented, we can achieve the dual objective: raise wages while keeping prices stable. Only then will people truly benefit from higher incomes,” commented Mr. Lang.

In the current context, the article concludes that wage increases are necessary, but ensuring prices do not “run ahead” is equally important for the extra income to translate into improved living standards for beneficiaries.

Vu Diep. VietNamNet