PD-06 Minimum Wages in Viet Nam: Preliminary Observations

Minimum wage has been widely used as a tool to correct labor market imperfections that can result in an unfair distribution of gains in productivity. At the same time, minimum wage is the legal guarantee of the government for laborers in all industries and sectors where there exists labor relations, ensuring the basic needs for daily life of employees. However, when set incorrectly, the provisions on minimum wages can lead to unemployment, especially for workers with low qualifications and professions, and reduce the competitiveness of enterprises.

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