Solutions needed to restore labour market

Monday, 2021-08-16 11:15:36
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NDO - The Covid-19 epidemic broke out in a number of provinces and cities from the end of April, with complicated and unpredictable developments creating many challenges and risks for Vietnam in the implementation of the dual goal on both preventing and combating COVID-19 while boosting economic development.

The report of the Department of Employment under the Ministry of Labour, Invalids and Social Affairs shows that the labour market in Vietnam was negatively impacted in the first seven months of the year along with the increase in the number of Covid-19 infections.

By July 2021, with the implementation of social distancing under Directive 16 in 19 southern provinces and cities as well as Hanoi and some locations in other provinces and cities, the labour force was reduced compared to previous month and the same period last year, with estimates at more than one million employees. The number of unemployed workers increased because many enterprises, production and business establishments were no longer able to fight the epidemic, so they were forced to cut labour.

The Covid-19 epidemic has negatively impacted workers in three economic groups. In which, workers in the agriculture, forestry and fishery sectors have been least affected (with 8.9% of workers in this sector affected), followed by industry and construction (24.6%), while service sector's workers are hardest hit (30.6%).

In July 2021, when the epidemic spread to key areas of the economy such as industrial parks, export processing zones and big cities, the epidemic had a strong impact on industries. Accordingly, up to 70% of seafood processing enterprises were closed because they could not apply the "three on the spot" method, 35% of textile and garment enterprises had to close, and more than 40,000 employees in the southern region of the Vietnam Textile and Garment Group are working under the conditions of social distancing.

In particular, the rate of self-employed workers was recorded as the highest in the past three years. The number of self-employed workers in the second quarter of 2021 was 20.9 million people, accounting for 57.4% of the labour force, an increase of 1.4 million people compared to the same period in 2020, showing that the Covid-19 epidemic has pushed many workers to lose their jobs and fall into a state of vulnerability due to lack of formal employment. At the same time, the outbreak of disease in the southern provinces and cities also led to the situation of large numbers of migrant workers returning to their hometowns.

According to quick statistics of the Departments of Labour, Invalids and Social Affairs, the demand for labourers' returning to their hometown is increasing. Currently, more than 50,000 people have registered with the local government. The movement of labour is a signal that shows the risk of labour shortage in large numbers during and after the epidemic, especially the shortage of unskilled labour working in processing enterprises in the leather, footwear, textile and garment industries, and the electronic components assembly sector in the near future.

In the face of potential long-term risks on both the supply and demand of labour market, the Department of Employment has proposed the upcoming scenarios for the Vietnamese labour market. In which, the worst scenario is that nearly 40 million workers will be negatively affected; and workers in all industries and occupations will be severely affected.

According to the Department of Employment, in order to restore the labour market to serve production activities, it is necessary to focus on implementing a number of important solutions to support difficulties for businesses and workers during the period of epidemic prevention and control. In particular, it is necessary to accelerate the vaccination schedule to soon achieve herd immunity, especially for frontline workers, workers in industrial parks and export processing zones, and workers in the tourism sector, as well as the import and export sector, to maintain production and prevent disruption of the global production chain.

It is necessary to have more policies to directly support businesses and employees, such as reducing loan interest rates, rescheduling debt repayment periods, reducing fees and charges; supporting workers directly by reducing interest rates on bank loans, reducing electricity, water, and gasoline prices; and supplementing support policies to ensure the safe life of migrant workers and self-employed workers so that workers can overcome difficulties during the pandemic as well as prepare human resources to resume production and business.

It is necessary to continue to supplement capital sources for lending to restore production, business, and create jobs; freeze new loans for enterprises to supplement working capital for production; and establish a labour market information system with timely forecasts, providing complete and accurate labour market information to connect labour supply and demand, thus limiting the imbalance between local labour supply and demand.

NHAT ANH
Translated by NDO
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