Uncertain recovery following labour market crisis

Uncertain recovery following labour market crisis. Source: freepik.com

Tentative signs of recovery are emerging in global labour markets, according to the latest report from the ILO. New annual estimates in the seventh edition of the ILO Monitor show that global labour markets suffered significantly in 2020.

As such, 8.8 per cent of global working hours were lost for the whole of last year (relative to the fourth quarter of 2019), equivalent to 255 million full-time jobs. This is approximately four times greater than the number lost during the 2009 global financial crisis.

These lost working hours are accounted for either by reduced working hours for those in employment or unprecedented levels of employment loss, hitting 114 million people. Of these, 71 per cent (81 million people) came in the form of inactivity, rather than unemployment, meaning that people left the labour market because they were unable to work, perhaps because of pandemic restrictions, or simply ceased to look for work. Looking at unemployment alone drastically understates the impact of COVID-19 on the labour market.

These massive losses resulted in an 8.3 per cent decline in global labour income (before support measures were included), equivalent to $3.7 trillion or 4.4 per cent of global GDP.

In Vietnam, the severe pandemic crisis has caused 32.1 million workers to lose their jobs or see reduced working hours. According to Hanoi Centre for Employment Services, the labour demand through the job exchange system in the city from the beginning of the year up to now has increased by about 20 per cent compared to the end of 2020.

On average, there are more than 3,000 new job positions every day, of which the employment rate requires workers with professional qualifications and skills each year accounts for 60-70 per cent.

Ho Chi Minh City Human Resources Forecast and Labour Market Information Centre predicted the city has around 70,000-75,000 vacancies in the first quarter of 2021, mostly in industries that require qualified workers such as IT, electronics, food processing, architecture, mechanics, logistics, marketing, customer services and more.

With the Lunar New Year holiday ended, many businesses in industrial and export processing zones in Ho Chi Minh City are recruiting more employees, such as Samsung, Daeyoung Electronics Vina, Tech-Link Silicones, and Furukawa Automotive Parts Vietnam.

However, continuing potential of coronavirus outbreaks are also caused businesses and employers to tighten their disease prevention measures.