Many workers "hold on" with low wages
Pouyuen Vietnam, the largest employer in Ho Chi Minh City, will continue to cut nearly 6,000 employees (equivalent to 10% of the company's total workforce). This is the second staff reduction by the company since the beginning of the year.
In many localities, labor cuts are also a reality for a series of businesses, especially labor-intensive businesses such as textiles, footwear, etc. The reason is a sharp decline in orders.
According to the Ministry of Labor, War Invalids and Social Affairs, the lack of orders is expected to continue, so the number of workers whose jobs have been cut may not stop here.
For workers, job cuts mean hardship upon hardship. Many are just trying to "hold on" with a meager salary. Those who are laid off have to find a new job, perhaps as a motorbike taxi driver, construction worker...
Last April, Mr. Cuong was laid off, and his wife was also just notified that she would be laid off in June. Having lost her job at the age of 44, for the past few months, Mr. Cuong has been working as a construction worker in the morning and parking attendant at a restaurant in the afternoon.
"In PouYuen, I worked and earned more than 10 million VND. But now, working outside is not like that. Working outside is only about 4.5 million VND, not enough for expenses. And then there's the children's education," said Chau Van Cuong (Tra Vinh).
Many workers have had their work cut short or even quit because businesses lack orders (Illustration photo)
If in previous years, May was the peak season for winter production, now textile and footwear factories in many localities are only producing at a moderate pace. For example, at Araviet Company Limited, workers start work at 7:30 am and leave at 4 pm. For more than 3 months, the start and end of shift times for workers at this garment factory are like office hours.
For Ms. Thuy, this is the first time in 10 years of working as a worker that she has encountered such a large decrease in income.
"Fewer orders make our income lower," said Nguyen Thi Thuy, a worker at Araviet Company.
The income here last year was nearly 10 million, now it is only 6-7 million/month, leading to some workers changing jobs. Decreased income means loss of labor. Businesses also have to try to cope, stretch out the work, try to work overtime a few days a week for an extra hour to keep workers.
"We are trying our best to maintain this situation but cannot increase work because there are no orders, but we still have to keep all current workers waiting for recovery," said Mr. Kim Jyung Tae, Production Director of Araviet Co., Ltd.
Unemployment is mostly simple labor
According to Ms. Tran Thi Thanh Ha - Head of Labor Relations Department, Vietnam General Confederation of Labor, from September 2022 to March 2023, statistics show that 560,000 workers were affected by the reduction of orders. Of which, up to 55,000 workers left the labor sector (contract termination).
Ms. Ha said that to support affected workers, the Vietnam General Confederation of Labor has a support policy that even if they are not union members but are in businesses that pay union fees, they will still receive support from 700,000 - 3 million VND/person.
Adjusting economic structure must be associated with labor structure.
According to Mr. Ngo Xuan Lieu, Director of the National Center for Employment Services, Department of Employment, Ministry of Labor, War Invalids and Social Affairs, based on daily aggregated data on the implementation of unemployment insurance policies, it shows that the majority of unemployed people are unskilled workers (accounting for 60-70%). Therefore, the labor structure is problematic, the higher the level of education of workers, the lower the risk of unemployment.
"Therefore, adjusting the economic structure must be linked to the labor structure, which is an issue that needs to be raised," Mr. Lieu emphasized.
Mr. Lieu assessed that the reduction of labor, especially in enterprises employing many workers, will put great pressure on localities in solving employment, as well as social security. Therefore, it is necessary to have policies to support enterprises in the process of recovery and production and business.
Need long-term support policy
Supporting workers when their jobs are cut, is not simply finding them new jobs. In Ho Chi Minh City, lessons from the COVID-19 outbreak as well as the recovery phase or facing a decline in economic growth have shown that to be proactive and have a long-term, continuous impact, it is not enough to rely on temporary solutions.
"The housing rent is being handled locally and has not yet become a policy in the difficult period of the City. We will study and propose a housing support policy for workers, especially workers who have stopped working, reduced work, and reduced income," said Mr. Phan Van Mai, Chairman of the Ho Chi Minh City People's Committee.
The basis for building the policy is to make the price of boarding houses, which accounts for 20-30% of workers' income, part of the price stabilization program that Ho Chi Minh City has successfully implemented for many years.
"This is a great desire of the City's trade union organization to make policies that go hand in hand with the lives and jobs of workers, not just temporary or ad hoc care activities," said Mr. Tran Doan Trung, Permanent Vice President of the Ho Chi Minh City Labor Federation.
Immediately after the COVID-19 pandemic, the Ho Chi Minh City Department of Construction proposed a VND100 billion preferential loan support package for landlords, who are currently providing accommodation for nearly 1 million workers.
Besides temporary solutions, long-term policies are essential to support workers (Illustration photo)
To build sustainable and long-term support policies for workers, according to Ms. Tran Thi Thanh Ha - Head of Labor Relations Department, Vietnam General Confederation of Labor, local authorities need to have support measures for businesses such as tax debt extension, tax incentives... In addition, there are credit policies for businesses as well as workers.
The textile, footwear, and wood processing industries have lost about 200,000 workers in recent times. Difficulties for businesses will lead to difficulties for workers. In this situation, the Prime Minister has requested the Ministry of Labor, War Invalids, and Social Affairs to promptly implement solutions and take the lead in developing a policy project to support workers.
These are necessary short-term solutions, but in the long term, to limit the reduction of labor, changing the structure of the labor market is of utmost importance. Workers with low qualifications and limited skills will be more affected and the risk of losing their jobs will also be higher.
Technology development will make abundant and cheap labor no longer a competitive advantage and investment attraction for Vietnam.
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