Rising incomes, mounting living costs squeeze workers' finances

Rising incomes are being offset by increasing living costs, leaving many workers under financial strain. Even where minimum wage adjustments have been made, take-home pay is being eroded by higher expenses across housing, food, utilities, fuel, and other essentials, reducing workers’ ability to cover daily needs and save.

Households report limited room to save

At Sao Mai Equipment Solutions Joint Stock Company in Binh Hung commune, Ho Chi Minh City, a couple—Nhung, a cleaner, and her husband, a security guard—save every dong from a combined take-home pay of 13–15 million VND per month. Despite wage increases through several adjustments, the couple says the income mainly covers basic costs such as housing, utilities, fuel, and groceries, leaving little capacity to save.

To raise income, Nhung takes additional evening work and cleaning jobs for acquaintances, earning an extra 1–2 million VND per month. However, she said the additional earnings are quickly absorbed by rising living costs. More than 50, she described her current job as difficult but necessary for stable income.

Nhung also cited a major financial shock in 2017, when her husband was diagnosed with malignant lymphoma. With limited savings, the family depleted its reserves and made a lump-sum withdrawal from social insurance to pay for treatment. “Looking back now, social insurance was helpful, but at that time we had no other option. We could eat frugally, but our child’s education costs could not be cut,” she said.

Another example comes from Mr. Nguyen Van Ha, a worker at a plastic company in Phu Dinh Ward, Ho Chi Minh City. He said that while basic wages have risen over the years, the company faces difficulties, shifts are fragmented, and overtime opportunities are scarce. As a result, his take-home pay is only 5–6 million VND per month. “Earlier I could work overtime to supplement income; now there is less work, and income has fallen sharply,” he said.

Ha said most of his spending goes to fixed costs including rent, utilities, fuel, and groceries. For children, education, meals, and medicine are harder to reduce. As living costs rise and overtime income declines, he said the household often struggles to cover essentials.

Minimum wage adjustments vs. cost-of-living pressures

For many workers, base-wage adjustments do not translate into proportional increases in total take-home pay and may even decline, prolonging hardship. A recent ILO report, The Impact of Minimum Wage in Vietnam, says that adjusting the minimum wage generally does not cause major employment disruptions, but it does affect wage costs, competitiveness, and social insurance participation.

The report also highlights regional differences. Household workers show higher rates of minimum-wage non-compliance, concentrated in agriculture, fishing, food production, and accommodation and services. In urban areas—where minimum wages are higher—many workers still report that take-home pay does not meet basic living costs, particularly migrant workers facing higher rents. Even with overtime, many struggle to cover minimum needs. In rural areas, lower costs mean the minimum wage can cover basic needs more effectively.

A key concern is that the pace of minimum-wage growth has not kept up with rising living costs. Rental housing, utilities, fuel, food, healthcare, and education continue to increase, weakening the purchasing power of income gains.

Policy and business responses

Lawyer Phan Thi Lan of the Ho Chi Minh City Bar said improving workers’ living standards requires a coordinated policy approach. She called for inflation control and efforts to stabilize housing, utilities, and food costs. She also said authorities should refine the minimum-wage setting mechanism based on living standards and productivity, and expand social protections including social housing, housing subsidies, and child support.

Beyond wage policy, she said enterprises should raise productivity, stabilize employment, and avoid excessive cuts to overtime to protect workers’ incomes. In the long term, firms should invest in training and skills development to support sustainable earnings.

Survey findings on wage adequacy and household impacts

A survey by the Vietnam General Confederation of Labour across 10 provinces with nearly 3,000 workers found that 54.9% said wages cover only basic expenditures. Another 26.3% reported cutting back on spending, while 7.9% said they cannot make ends meet and must work more. The survey also found that 12.5% borrow monthly to meet costs, with nearly 30% borrowing regularly. Only 55.5% said they can maintain adequate nutrition.

Financial pressure also affects family decisions: 72.6% of unmarried workers reported delaying marriage, and 72.5% of married workers said they hesitate to have more children. Education and health costs remain burdensome, with more than half saying wages cover only part of their needs and 6.9% unable to cover healthcare costs.

Overall, experts emphasized that meaningful wage gains depend on cohesive policy actions—controlling inflation, stabilizing housing costs, and expanding social protections—while businesses should improve productivity, stabilize jobs, and invest in workers’ skills to support sustainable income growth.