Nationwide, 31.8 million people aged 15 and over were negatively affected by Covid-19
As of September 2020, there were 31.8 million people aged 15 and over negatively affected by Covid-19, including those who lost their jobs, went on furlough/took time off work alternately, reduced working hours, suffered income reduction, etc. Of these, 68.9% of people suffered income reduction, albeit to a small degree, nearly 40.0% reduced working hours/took time off work alternately/worked in alternate schedules and about 14.0% went on furlough or suspended their business activities.
The Service sector has been hardest hit by Covid-19, with 68.9% of workers affected, followed by Industry and Construction sector with 66.4% of workers affected; the percentage of affected workers in the Agriculture, Forestry and Fisheries sector reached 27.0%.
Labour force rebounded following the record low decline in the second quarter of 2020 but has yet to recover to the state of the same period last year.
The labour force aged 15 and over in the third quarter of 2020 was 54.6 million people, an increase of 1.4 million people from the previous quarter but still 1.1 million people lower than the same period last year. This shows that, following the record low decline in the second quarter of 2020, the labour market is showing signs of recovery, but has not yet been able to recover to the state of the same period last year.
In the average first nine months of 2020, the labour force aged 15 and over have reached 54.4 million people, a decrease of 1.2 million people over the same period last year and mainly in rural areas. In the period 2016-2019, the labour force in the first nine months of the year increased by 1.0% per year on average. If the labour force in the first nine months of 2020 maintained the same growth rate as in the 2016-2019 period and there were no Covid-19 pandemic, the Vietnamese economy would have 1.8 million more workers. In other words, the Covid-19 pandemic might have deprived 1.8 million people of their opportunity to enter the labour market.
Labour force in the third quarter of 2020 recovered faster in rural areas and among female workers. Specifically, compared with the previous quarter, the labour force in rural areas increased by 3.0%, 0.8 percentage points higher than the growth rate of urban areas; the female labour force increased by 4.1%, 2.6 percentage points higher than the growth rate of the male labour force.
Overall, in the average first nine months of 2020, rural workers and female workers are still those most significantly affected by the impact of Covid-19 with the decreases in the labour force of these two groups of 3.2% and 2.3%, respectively, compared with the same period last year.
Workers in some service industries such as transportation and storage; accommodation and food services activities; arts, recreation and entertainment were strongly impacted by Covid-19.
Employed population aged 15 and over in the third quarter of 2020 reached 53.3 million people, an increase of 1.5 million people from the previous quarter and a decrease of nearly 1.3 million people against the same period last year. Employed labourers in urban areas increased by 471.0 thousand people against the previous quarter and decreased 77.9 thousand people against the same period last year; in rural areas, the number of employed people increased by more than 1.0 million from the previous quarter and by 1.2 million from the same period last year.
Employed population aged 15 and over in the average first nine months of 2020 reached 53.1 million people, a decrease of 1.3 million people over the same period last year. In particular, the number of employed workers decreased sharply in rural areas, by nearly 1.2 million people; male workers decreased by 608.6 thousand people and female workers by 734.1 thousand people.
As of September 2020, the Covid-19 pandemic has affected employees working in most industries, some of which have witnessed large proportions of those affected. These include, for example, arts, recreation and entertainment (88.6%), accommodation and food services activities (81.7%), transportation and storage (79.7%), administrative and supporting activities (72.7%), manufacturing (70.1%), wholesale and retail trade, repair of motor vehicles and motorcycles (68.5%), education and training (68.5%), real estate activities (67.8%).
Employed workers increased relative to the previous quarter mainly in the informal group; the growth rate of the informal workers was higher than that of the formal economy workers
The number of informal workers in the third quarter of 2020 was 20.7 million people, an increase of 1.2 million people against the previous quarter and an increase of 149 thousand people over the same period last year. Compared to the previous quarter, the growth rate of workers with informal jobs was higher than that of workers with formal jobs (5.8% and 0.8% respectively). This implies that the current labour market recovery is unsustainable as informal workers are said to be those facing many vulnerabilities and disadvantages, and those who find it difficult to access welfare and social insurance regimes.
The proportion of workers with informal jobs in the third quarter of 2020 was 57.0%, an increase of 1.2 percentage points from the previous quarter and 1.0 percentage points from the same period last year.
In the average first nine months of 2020, the proportion of workers with informal jobs nationwide is 56.0%, an increase of 0.1 percentage points from the same period last year.
The Covid-19 pandemic significantly increased the number of underemployed workers in all three economic sectors
The number of underemployed working age people in the third quarter of 2020 was 1.3 million people, down 81.4 thousand people against the previous quarter, but still 560.4 thousand higher than the same period last year. The underemployment rate of working-age workers in the third quarter of 2020 was 2.79%, down 0.29 percentage points from the previous quarter and up 1.21 percentage points against the same period last year.
Nearly half of the underemployed working-age people in the third quarter of 2020 are working in the agriculture, forestry and fishery sector, accounting for 49.3%, down 26.1 percentage points compared to the same period last year; the industry and construction sector accounted for 25.9%, up 17.6 percentage points; the service sector accounted for 24.8%, up 8.5 percentage points. Thus, the current underemployment is not only concentrated in the primary sector but is increasing in the secondary and tertiary sectors.
The rate of underemployed workers in the third quarter of 2020 in the agriculture, forestry and fishery sector is 4.80% (up 0.76 percentage points compared to the same period last year); industry and construction sector is 2.14% (up 1.75 percentage points over the same period last year) and in service sector is 1.85% (up 1.15 percentage points over the same period last year).
For workers in the working-age group, the higher the professional and technical qualifications, the lower the underemployment rate. The underemployment rate in the third quarter of 2020 for workers without professional and technical qualifications is 3.20%, elementary vocational level 2.54%; the intermediate vocational level 1.71%; college/advanced vocational level 1.59%; and those with university and higher qualifications 1.15%.
Employees’ income in the third quarter of 2020 saw improvement relative to the second quarter of 2020 but still decreased compared to the same period last year.
Average monthly income of employees in the third quarter of 2020 was 5.5 million VND, an increase of 258 thousand VND against the previous quarter and a decrease of 115 thousand VND against the same period last year. Average monthly income of male workers was 1.4 times higher than that of female workers (6.3 million VND and 4.6 million VND, respectively); and the average monthly income of workers in urban areas is 1.5 times higher than that of rural areas (7.0 million VND and 4.8 million VND, respectively).
In the average first nine months of 2020, the average income of employees decreased by 1.5% over the same period last year (corresponding to a decrease of 83 thousand VND). The income of workers in most industries decreased, with the largest drops in the following industries: administrative activities and support services (down 6.5%), accommodation and food services activities (down 5.9%), transportation and storage (down 4.9%). In addition, some industries have seen the increase in income such as information and communication (up 1.7%), healthcare and social work activities (up 3.3%).
The average monthly income of the informal employees[1] in the average first nine months of 2020 is 5.5 million VND, 1.5 times lower than that of the formal workers (8.4 million VND). Compared to the same period last year, the average monthly income of the formal workers decreased by 1.9% and that of the informal workers decreased by 0.8%.
The longer the job tenure, the lower the reduction in pay. Compared to the same period last year, the income earned within the first nine months of 2020 by workers with the tenure of three years or longer has the lowest decrease (down 0.6%), while income among those workers with the tenure from 3 months to less than 3 years has decreased by 3.8%, and income among those working less than 3 months has decreased 42.6%. This indicates that the workers who are new entrants of the labour market have become more vulnerable in the context where Covid-19 has a profound impact on the labour and employment situation.
The working-age unemployment rate in urban areas decreased compared to the previous quarter, but remained highest of all same periods in the years 2011-2020
The number of unemployed working-age people in the third quarter of 2020 was over 1.2 million people, down 63.0 thousand people against the previous quarter and increasing 148.2 thousand people against the same period last year. The working-age unemployment rate in the third quarter of 2020 is 2.50%, down 0.23 percentage points from the previous quarter and up 0.33 percentage points against the same period last year.
The working-age unemployment rate in the average first nine months of 2020 is 2.48%, 0.31 percentage points higher than the same period last year.
Nearly half of the working-age unemployed have reported being negatively affected by Covid-19 as of September 2020. This rate of the unemployed with no technical or professional qualifications is 61.7%, or 23.2 percentage points higher than those with professional and technical qualifications (38.5%). This shows that when the economy is in shock, unskilled workers are more vulnerable than those with professional and technical qualifications
The number of unemployed youth aged 15-24 in the average first nine months of 2020 is 437.4 thousand people, accounting for 35.4% of the total number of unemployed people (down 7.8 percentage points compared to the same period last year). The youth unemployment rate in the average first nine months of 2020 is 7.07%, an increase of 0.45 percentage points over the same period last year.
At present, there is still a significant untapped potential labour force, especially the young one; the use of this group of workers has become all the more limited in the context of Covid-19
Workers who have a need to work but do not have enough work (also known as labour underutilization) include the unemployed, underemployed, and those outside the labour force who are available for employment although they are not seeking or who are seeking employment although they are not immediately available.
Labour underutilization rate is the ratio of workers who have a need to work but their needs of job are not fully met compared to the extended total labour force. This is an aggregate indicator that indicates the “mismatch” between the supply and demand of labour in the market, reflecting the labour redundancy. In the context of normal economic development, the rate of labour underutilization always exists but remains stable. This rate often rises when the market suffers from socio-economic shocks.
Findings from the Quarterly Labour Force Surveys for the 2018-2019 period show that the rate of labour underutilization in Viet Nam fluctuates at 4.0%. This rate has started to increase when Covid-19 occurred from January 2020 in Viet Nam, accounting for 4.6% in the first quarter of 2020 and increasing to 5.8% in the second quarter of 2020. Turning to the third year of 2020, when socio-economic activities have gradually resumed, the proportion of underutilized labour has decreased to 5.3%, down 0.5 percentage points compared to the previous quarter but still up by more than 1.6 percentage points over the same period last year. In the first nine months of 2020, the rate of labour underutilization was 5.2%, an increase of 1.3 percentage points over the same period last year, corresponding to an increase of more than 700 thousand people.
The rate of labour underutilization in the average first nine months of 2020 was higher in urban areas than in rural areas (5.7% compared to 5.0%), and of female workers was higher than that of male workers (5.6% vs. 4.9%). The majority of underutilized workers were those under 35 years old (56.9%), while the labour force under 35 years old only accounted for 36.9%. This shows that Viet Nam still has a significant untapped potential labour force, especially the young one; the use of this group of workers has become all the more limited in the context of Covid-19.
One-third of enterprises participating in the quick survey reported having to take measures to reduce their workforces; air transport, tourism and accommodation services have observed the highest numbers of job cuts
The Covid-19 pandemic had a strong impact on the performance of enterprises, causing 33.4% to take measures to reduce staff in the first nine months of 2020 compared to the same period last year. It is anticipated that by the end of 2020, the rate of enterprises resorting to staff reduction measures may reach 36.4% compared to the same period last year.
Small and medium-sized enterprises are those that have to cut their jobs the most, with the average number of employees in nine months decreasing by 10.0% compared to the same period last year. Meanwhile, the rate of job cuts by large enterprises is 4.5%.
In the first nine months of 2020, the industries with the significant decrease in the number of employees include the following: the air transport and the tourism by 30.4%; accommodation service by 29.9%; sports, recreation and entertainment by 17.4%; food and beverage by 15.4%; and the construction industry by 14.1%.
Among the employees who were working in the surveyed enterprises as of September 10, 2020, 7.8% of them experienced a reduction in pay, 5.0% took time off work alternately/worked in alternate schedules and 2.4% went on furlough. The proportion of employees with salary reduction in enterprises in the air transport industry is highest, 99.5%, followed by the tourism industry with 43.2%, and then the accommodation service with 27.8%.
Among the surveyed enterprises, 66.6% of enterprises have taken measures to cope with the impact of Covid-19. In particular, providing capacity-strengthening trainings to workers was chosen by 25.8% of enterprises, second highest just after finding new consumer markets (41.4%). In addition, when asked about their expectations of the Government’s support policies in the coming time, about 10% of enterprises stated that “support in vocational training for workers to transfer jobs due to change or loss of jobs as a result of Covid-19” was one of the three measures that the Government should place priority on in order to support the production and business activities of enterprises in the future.
As of the time of the survey, the proportion of enterprises that have received support over the total number of enterprises participating in the survey was 17.9%; of these, 4.0% of enterprises have received support related to labour policy and social insurance.