COVID-19 pandemic causes shocks to labour market

July 11, 2020 - 07:37

More than 30.8 million people aged 15 and above have been adversely affected by COVID-19, either losing their jobs or having their salaries seriously slashed.


A worker gets free rice from a rice ATM set up during COVID-19 pandemic to support poor people and workers at Suối Dầu Industrial Zone in the central province of Khánh Hoà. — VNA/VNS Photo Phan Sáu

HÀ NỘI — More than 30.8 million people aged 15 and above have been adversely affected by COVID-19, either losing their jobs or having their salaries seriously slashed.

The shocking statistic came from Phạm Quang Vinh, deputy director general of General Statistics Office (GSO) of Việt Nam.

He was speaking at the launch of the latest quarterly Labour Force Survey which revealed 17.6 million people have had their incomes reduced.

Vinh said it was the service sector that was hit the hardest, with 72 per cent of people either losing their jobs or having their wages seriously cut.

Industrial production and construction saw 67.8 per cent of labourers in the sectors affected.

About 25.1 per cent of people working in agriculture, forestry and aquaculture said they were also affected by the pandemic.

Vũ Thị Thu Thuỷ, director of Population and Labour Statistics Department under the GSO reported that the second quarter of this year saw a record low level of labour force in Việt Nam – just 53.1 million people.

It shrank by 2.2 million compared to the previous quarter and by 2.4 million compared to the same period last year.

About 46.8 million people of working age joined the labour force, a decrease of 2.1 million people compared to the previous quarter and 2.2 million people compared to the same period last year.

Thuỷ added that in the second quarter of 2020, 51.8 million people in Việt Nam found employment, marking a reduction of 2.4 million compared to that of the first quarter and a reduction of nearly 2.6 million compared to the same period last year.

“The reductions are the biggest in the last ten years,” Thuỷ said.

Nearly 1.3 million people of working age were out of work in the last quarter.

Unemployment rate was 2.73 per cent, 0.51 per cent higher than that of previous quarter and 0.57 per cent higher than that of the same period last year.

Unemployment in urban areas was 4.46 per cent – the highest rate for a single quarter in the last ten years.

This year is the first time when workers’ income in the second quarter has recorded a year-on-year decrease in the last five years. The average monthly income in this period was VNĐ5.2 million, down by 5.1 per cent against the previous year.

Informal workers suffered worse than formal workers. Their monthly income dropped by 8.4 per cent and 4.7 per cent year on year respectively. The higher qualifications the workers hold, the lower their income reduced.

Valentina Barcucci, ILO Việt Nam’s Labour Economist, said the report revealed an alarming picture of Việt Nam’s labour market. In the second quarter of 2020, it suffered from a mix of elements.

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The preventive social distancing period at the beginning of the quarter brought the virus under control quickly, with limited impact on the domestic market compared to what other countries have experienced.

“However, impacts are unavoidable due to the scale of the necessary measures adopted,” she added.

“On the other hand, lockdowns in other countries and border closures in the last quarter have had a strong blow on Việt Nam’s economy and jobs.”

The pandemic has reduced economic activity in some sectors, such as service industry and construction, to unprecedented levels.

“As a result, we observe workers who have lost their jobs but are not looking for new jobs, probably because there are not many opportunities around,” Barcucci added.

Regarding the issue, the ILO Việt Nam Director Chang-Hee Lee said he believed Việt Nam was better positioned than most other countries in overcoming the economic and labour market challenges as it did with the public health crisis.

Stimulating the economy and jobs; supporting enterprises, employment and incomes; protecting workers in the workplace; and using social dialogue between government, workers and employers to find solutions are what Việt Nam would need to persistently continue, he said.

“It’s time for the Government, employers and workers to unite together to develop and implement evidence-based policies and measures to help the country come out of this crisis even in a better shape than when it started,” he added.

GSO official Thuỷ said now was the time to speed up the implementation of Government’s bailout packages to affected people, business and economic sectors.

More tailor-made supporting packages should be studied, developed and implemented for vulnerable groups like women or non-skilled/low-skilled workers.

Thuỷ said that in the context when COVID-19 was still not under control, there was an increase in the number of labourers whose potential ability was not used.

“Government should have policies to encourage labour to improve their expertise/skills as well as assist employers to further train their employees,” she said, calling for more support for start-ups, innovations and technology applications.

GSO deputy director general Vinh said despite the fact COVID-19 was effectively under control in Việt Nam, the pandemic still developed complicatedly around the world, resulting in negative impacts on the country, for example, to its trade, tourism and transportation.

“Among the impacts, it’s possibly that in the future, Việt Nam’s enterprises may face the shortage of input materials, forcing them to downsize their productions and as the results, jobs would be cut,” he said.

He emphasised the importance of implementing bailout packages, disbursement of public investment and called on people to use Vietnamese products more and more as a way to strengthen domestic production. — VNS