Job seekers and business representatives meet at a job fair in the southern industrial province of Binh Duong
A few years ago, her current predicament would have been unthinkable for Le Thu Trang, a resident of Hanoi’s Tu Liem District.
She and her family, who were living a comfortable life, now live in a cramped, rented accommodation after selling their apartment to pay debts and meet their daily needs.
Trang’s husband, head of the sales department of a tea export company, lost his job two years ago when the firm shut down after suffering huge losses. The four-member family had lived on Trang’s salary until she was laid off recently by her employer, a property developer.
“I don’t know how to continue living when both of us are jobless. We earn no money while having monthly expenses of at least VND7-8 million (US$333.3-$381) to live in the city,” Trang, 32, said.
Trang is among hundreds of thousands who have lost their jobs as firms nationwide cutback on production and scale back operations, laying off workers or drastically reducing working hours as demand falls, in both domestic and overseas markets.
Nguyen Dinh Thang, vice chairman of the trade union of Hanoi’s industrial parks and processing zones, said four firms in 18 industrial parks have stopped operations, while many others have decreased production. The sight of announcements needing thousands of workers hung on trees and electric poles or pasted at the gates of electric, garment and footwear firms along streets, common in Hanoi’s industrial parks until recently, is a rare one now. Only firms operating in the service sector need workers, mainly sales personnel, but this demand has also gone down, Thang said.
In the port city of Hai Phong, the unemployment situation is serious. By early October, 2012, over 6,500 laborers had registered to receive unemployment insurance, according to the city’s Department of Labor, War Invalids and Social Affairs.
Meanwhile, in Ho Chi Minh City, the number of people who had registered for unemployment insurance payments was more than 128,000 as of late November, 2012, an increase of 22.8 percent from the beginning of this year.
Tran Anh Tuan, deputy director of the Ho Chi Minh City Center for Forecasting Manpower Needs and Labor Market Information, said firms in the city needed some 20,000 workers last month, 50 percent of which was for seasonal employment, including sales and customer care staff and waiters.
He said the city will need around 20,000 workers for this quarter, but the number of job seekers is six times higher than the demand, making it much more difficult to find work.
Le Quang Trung, deputy head of the Job Department under the Ministry of Labor, War Invalids and Social Affairs, said the main reason for the unemployment hike is the economic downturn, forcing many firms to shut down or narrow their business operations, leaving thousands jobless.
According to the Vietnam Chamber of Commerce and Industry, some 500 firms shut down or went bankrupt every month in 2012. This number for 2011 and 2012 was half the total of the past 10 years, it said.
Nguyen Thi Lan Huong, head of the Labor and Social Science Institute under the Ministry of Labor, War Invalids and Social Affairs, said unemployment rose last year, with firms not only cutting manual laborers, but white-collar staff as well.
“Many experts in their fields have registered to receive unemployment benefits as foreign invested firms have downsized their business in Vietnam,” she said.
Late last year, an anonymous email was sent to the general director of the commercial bank SeABank and a local newspaper, accusing the bank of cutting workers en masse and forcing them to resign “voluntarily,” to avoid compensating them for terminating labor contracts prior to their expiry, local newswire VnExpress reported.
The author of the email said the bank’s human resources department has claimed the bank is in a bad financial situation and restructuring its business, so it has to cut staff.
Nearly one million workers remained unemployed as the economy couldn’t create enough jobs for both new entrants to the labor force and those already unemployed, according to the Labor Force Survey Report 2012 recently released by the General Statistics Office (GSO) with the support of the International Labor Organization (ILO).
The unemployment rate continued to stay higher in urban areas than in the countryside. In the first three quarters, the report said 3.3 percent of the urban labor force is unemployed, compared to 1.4 percent in the countryside.
Although the unemployment rate in Vietnam was not high despite the economic slowdown, many workers had little choice but to accept low-paying, unstable jobs in the informal sector to support themselves and their families, said ILO Vietnam Country Director Gyorgy Sziraczki.
“More resources should be spent addressing the informal economy, which is typically linked to low productivity, little protection and poor income,” he said.
Nguyen Ngoc Thu, director of a garment firm in Bac Ninh Province, said: “We do not have any plans to recruit more workers. It is very difficult to ensure work for our current employees.”
“Our main markets, the US and EU, have not showed signs of recovery from the economic slowdown. I don’t think the orders from customers will rebound anytime soon,” he said.
Overseas jobs are not a big hope anymore as those markets are also tightening their belts and many major labor importing countries already have a high rate of illegal guest workers from Vietnam.
The South Korean government late last year decided not to extend its Employment Permit System to Vietnam after the latest agreement expired last August, while other major labor markets, including Japan and Taiwan, also look set to close the doors to Vietnamese employees, according to the Ministry of Labor, War Invalids and Social Affairs.
An economist said the economy will continue to face difficulties this year, thus workers will find hard to find jobs. “Competition in work will be fiercer, laborers will find more difficulties finding work, and unemployment rate will increase.”
Vietnam’s gross domestic product (GDP) rose 5.03 percent last year, down from 5.89 percent in the previous year and the least since 4.77 percent in 1999, the General Statistics Office said. The government said it has set a GDP growth of 5.5 percent for 2013.
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By Bao Van, Thanh Nien News (The story can be found in the January 4th issue of our printed edition, Vietweek)