Nhan said that in addition to economic growth objectives, sustainable human development should also be a focus.

Citing stories about South Korea and Japan, which experienced over 33 years of double-digit growth followed by 29 years of flat growth, Nhan proposed two pathways:  boosting the economy and maintaining a replacement fertility rate.

“For a woman to have two children, the salary of one person should be high enough to cover the expenses for themselves and one child, and the income of two people should be sufficient to support a family of four,” Nhan said. 

Internationally, this is called ‘subsistence wage’, not ‘minimum wage’. 

“The biggest reason for the decline in replacement rate is the inability to adequately support two children,” Nhan explained. 

Nhan believes that there should be a shift from ‘minimum wage’ to ‘subsistence wage’. In HCM City, most people if asked how high the income of a couple should be to be able to support a family of four, would say VND20-21 million.

“Thus, the average subsistence wage for one person is VND10.5 million a month. But currently, the average monthly income is just VND4.96 million in HCM City,” Nhan noted, adding that a salary increase schedule is needed to ensure that people can afford to have children.

In response to the concern that if Vietnam raises minimum wage it will no longer be attractive to foreign investors, Nhan said there is need to worry about that.

Once the average wage per capita is VND10.5 million a month, the wage for one hour of work would be $1.9. At present, the figure is just $0.95 per hour.

Other countries pay $6.9 per hour, or 7.26 times higher than Vietnam. This means that Vietnam’s subsistence wage is just equal to 27 percent of the minimum wage in South Korea.

If compared with Japan, which pays $7.23 per hour at least, Vietnam’s figure would be just equal to 26 percent. As for the US, the figure is $7.25 per hour, but it has not increased over the last 15 years, while the inflation rate has risen.

“The figures show that the subsistence wage in Vietnam is still attractive enough to attract foreign investment,” Nhan said.

He warned that if the current problems cannot be solved by 2040, Vietnam might see a generation of youth characterized by three ‘no’s: No spouse - no children – no worry (because of no children), which could affect the survival of the country.

Thu Hang