Initiatives pull jobless rate from rock bottom

July 22, 2020 | 08:00
Even though Vietnam has received praise over its pandemic success thus far, the country has been facing another threat placing thousands of lives at risk – increasing unemployment, with rates hitting the worst point in a decade.
1501p24 initiatives pull jobless rate from rock bottom
Laid-off workers are having to open up their options to get a new job, Photo: Dung Minh

Several months ago, Nguyen Anh Tuan from the northern province of Nam Dinh was a driver for Hanoi-based G7 Taxis. The job provided Tuan and his wife stable income to cover living expenses in the big bustling city. His earnings also helped him pay off loans and save for their three children, who are living with their grandparents at home.

Now, instead of wheeling around Hanoi’s streets with his passengers, Tuan has been travelling to the Hanoi Centre for Employment Services (HCES), patiently waiting to file for unemployment and draw benefits.

Tuan shared with VIR that the COVID-19 pandemic had taken away his livelihood. During social distancing without any customers, he had to sell the car to pay his debts, and accepted any temporary job in order to earn a living.

“I will receive more than VND40 million ($1,740), including a five-month basic salary of unemployment benefits, plus a one-time payment upon withdrawal. This amount is not that large, but can be enough for my family for a few months until I find a new job,” Tuan said.

Tuan represents some 31 million workers in Vietnam in the same situation, with the pandemic sweeping away their jobs, and their lives facing little ahead except for disturbance.

According to the General Statistics Office, Vietnam recorded a dramatic slash in the labour force with the number of employees in the second quarter surging 2.2 million from the previous quarter, falling by 2.4 million on-year. Labour market participation rates have fallen even further in rural areas and among the female workforce.

The second quarter also witnessed the highest unemployment rate among the working age in the past 10 years, which peaked at 2.73 per cent, with the low- and unskilled worker group seeing the highest rate.

Also in the previous quarter, for the first time in five years the average monthly income of Vietnamese workers bottomed out at VND5.2 million, down 5.1 per cent compared to the same period in 2019.

“The labour market in the second quarter of 2020 suffered from a mix of elements,” said Valentina Barcucci, economist at the International Labour Organization in Vietnam. “We observe workers who have lost their jobs but are not looking for new ones, probably because there are not many opportunities around.”

The rocketing jobless rates are significantly responsible for the dramatic increase in applications for unemployment benefits in the first half of the year, which stands at nearly 570,000. According to the Ministry of Labour, Invalids and Social Affairs (MoLISA), 507,585 people have received unemployment benefits within the first six months of 2020, a year-on-year increase of 32 per cent.

In the first half of 2020, the HCES granted unemployment benefits in nearly 40,000 cases, an increase of around 8,750 against the same period last year, of which the group under 35 years old contributed significantly to applications, with nearly 22,000 people accounting for 54 per cent of total unemployment benefit applications.

Nguyen Thi Huu, 25, used to work as office staff in Ho Chi Minh City but after maternity leave moved to Hanoi and has been unemployed ever since. For three months she has visited the HCES frequently for unemployment allowance of around VND4 million ($175) a month.

“Finding a new job is a battle now,” Huu stated. I have gone to some job interviews but there has been no reply so far. I only have two months of benefits left and I have no choice but to find a job by then.”

In such an employment crisis, localities have strengthened connections by recruiting, setting up vocational training units, and organising a series of activities to help jobseekers.

While the worker supporting programme by the Ho Chi Minh Youth Employment Services Centre has introduced some 15,000 vacancies to young people, the Binh Duong Employment Services Centre has also provided employment information from businesses to employees and assisted students and trainees to get internship course.

In Hanoi, the HCES has launched schemes to support recruitment registration for businesses through job exchanges, including offline services and online interviews. HCES deputy director Vu Quang Thanh said that Hanoi is currently seeing nearly 1,000 enterprises registering to recruit more than 10,000 employees, focusing on business, mechanics, electronics, accounting, and administration.

The MoLISA has, meanwhile, reported that Vietnam’s labour market is showing signs of recovery with a number of halted sectors resuming. It is expected that in the third quarter, the market will prosper with about 55.4 million employed workers.

“Fast-moving consumer goods, transportation, supply-logistics, agriculture, and food and beverage production chains are on the rise again,” said Vo Thi Bich Thuy, manager of Permanent Recruitment and Consulting Services at ManpowerGroup Vietnam. “The online business sector also continues to increase recruiting demand for positions of skills of all levels,” she added.

On the other hand, before waiting for the labour market to revive, many Vietnamese workers have taken advantage of the period of hardship by actively learning additional skills and improving older ones in order to have more chances of a suitable job.

Former taxi driver Tuan, after a period of unemployment, has now become an apprentice mechanic and is also installing air conditioners. Tuan has found that the income from this job averages about VND200,000-300,000 ($8.70-13) for half a day, taking up much less time than being a taxi driver. “I am thinking about becoming a freelance worker, if possible,” Tuan said with optimism. “There is a chance my life could be even better than before.”

By Mai Oanh

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