From 1991 to 2015, the minimum wage has increased a total of 7 times in Laos. According to the Department of Labor Regulation, an 8th change is set to happen within this year. The proposed minimum wage increase is substantial: from 900,000 kip to 1,200,000 kip per month.
Phongxaysack Inthalath, Director General of the Department of Labor Regulation, recounts the history of the Lao minimum wage dating before Asian Financial Crisis times.
“In 1991, the minimum wage was 26,000 kip per month. In 1997, it increased to 36,400 kip. In 2000, it became 93,600 kip. Then in 2005, it more than doubled to 290,000 kip. In 2009, it was 348,000 kip. In 2015, it was bumped up to 900,000 kip.”
After a three year stint at its current rate, the minimum wage is set to change once again. According to the collaborative findings of three governmental bodies, namely the LNCCI (Lao National Chamber of Commerce and Industry), the Lao Labor Union, the Ministry of Labor and Social Welfare, and others, the primary factor that has led to this wage hike proposal is rising living costs due to the country’s relatively high economic growth. The aforementioned entities are currently discussing with other state bodies about the potential impact of such a hike on the country’s economy.
Seventy-seven officials have been appointed to inspect workers in select factories, large scale construction sites, power plants, and other businesses totalling 85,056 people, of which 67,524 are Lao and 17,532 are foreign. Of the businesses inspected, 2,787 were industrial, 425 were agricultural, and 1,963 belonged to the service sector. Industrial workers received an average of 1,200,000 kip per month. Agricultural labor received 1,100,000 kip per month, and service sector employees were paid an average of 2,500,000 kip per month.