In 2021, based on the recommendations of the International Labour Organization (ILO), the General Statistics Office has organized the collection and calculation of labour and employment indicators using the new conceptual framework agreed by the member states at the 19th International Conference on Labour Statistics (ICLS 19) held in October 2013 in Geneva, Switzerland. This conceptual framework is commonly referred to as the ICLS 19 standard, promulgated to replace the ICLS 13, 1982. The birth of the ICLS 19 standard was meant to replace the ICLS 13 standard in the context of strong development of science and technology, and the positive transformation to modern market economies by most countries in the world with virtually negligible dependence on subsistence products. Under the new ICLS 19 standard, those who work for the purpose of making subsistence products in the agriculture, forestry and fishery sector will not be identified as employed as previously defined by the ICLS 13. The ICLS 19 standard is recommended for worldwide use with the aim of ensuring international comparability among market economies with different levels of development globally.
As from Q1/2021, the General Statistics Office will officially publish the labour and employment indicators based on ICLS 19 standard. Furthermore, to allow for the full assessment of the fluctuations of the labour market over time, the General Statistics Office will concurrently calculate and re-publish the labour and employment indicators using the ICLS 19 standard for all the quarters of 2019 until present as a basis for comparison. Information on workers engaged in subsistence employment in the agriculture, forestry and fishery sector is also recorded and made publicly available in this report.
1. International and national economic contexts
The global economy has undergone a turbulent year, predominated by the “grey gloom” due to the severe influence of the Covid-19 pandemic. In December 2020, the vaccine for acute respiratory infections Covid-19 was born to help curb the pandemic and recover economic activities. The world economy has shown signs of significant recovery.
In its 2021 Global Economic Prospects report, the World Bank (WB) forecasts that world economic growth will reach 4% and that of Viet Nam, one of the few countries with positive annual growth in 2020, is expected to reach 6.8%.
In the field of labour and employment, the International Labour Organization (ILO) stated that the labour market has begun to show signs of recovery after unprecedented disruptions caused by the Covid-19 pandemic. Nevertheless, its negative impacts are still going on. The ILO Covid-19 Monitor shows the latest data revealing that global working hours in 2020 have dropped by 8.8% against Q4/2019. This drop includes both the reduction in hours worked among those who are still employed and those who lost their jobs. Notably, about 71% of people who lost their jobs (equivalent to 81 million workers) have decided to leave the labour market instead of looking for another job and become unemployed people. These horrendous losses have resulted in the drop of the global labour earnings by 8.3%, equivalent to US$3.7 trillion or 4.4% of global Gross Domestic Product (GDP).
In the national context, the Covid-19 pandemic in some provinces just days before the Lunar New Year this year has negatively affected the labour and employment situation of the whole country and slowed down the momentum of job recovery and improvement in workers’ wages in Q1/2021. The Q1/2021 labour force survey (LFS) findings show that the number of people participating in the labour market has decreased compared to the previous quarter and the same period last year. The rates of informally employed and underemployed workers have both increased compared to the previous quarter and the same period last year. While workers’ wages increased, the growth rate was much lower than the same period before the pandemic.
2. Impact of the Covid-19 pandemic on the labour and employment situation
Currently, still 9.1 million people aged 15 and over across the country are negatively affected by the Covid-19 pandemic
Despite the strong efforts in the economic recovery coupled with pandemic prevention and response which have resulted in the improvement of the grey gloom of the labour and employment situation in the country, in Q1/2021, still 9.1 million people aged 15 and over across the country were negatively affected[1] by the Covid-19 pandemic, 51.0% of whom are male and nearly two-thirds were between the ages of 25 and 54.
Out of a total of 9.1 million people adversely affected by the Covid-19 pandemic, 540,000 people lost their jobs, 2.8 million people were furloughed or suspended their production and business operations; 3.1 million workers reported having reduced their working hours or being forced to work on a reduced schedule or take alternate shifts; and 6.5 million workers reported having experienced a drop in their earnings.
Workers in urban areas were more severely affected than those in rural areas with 15.6% of workers in urban areas still affected, compared with 10.4% in rural areas.
The unemployed workers were most severely affected as 36.3% of them were still negatively affected, followed by employed workers (15.5%); only 4.3% of economically inactive workers remained negatively affected by the pandemic.
From an economic sector perspective, the sector least affected by the pandemic was agriculture, forestry and fisheries with 7.5% of workers reporting having been negatively affected by the pandemic. Industry and construction sector ranked second with 16.5% of workers affected. Workers in the service sector were those most severely affected, standing at 20.4%.
The labour force in Q1/2021 has decreased compared to the previous quarter and the same period last year. The growing trend in the number of workers in the following year compared to the same period of previous years is no longer obvious
The labour force aged 15 and over in Q1/2021 was 51.0 million people, down 1.1 million from the previous quarter and 180.9 thousand people from the same period last year. Compared with the previous quarter, the decline in the labour force is a trend that is often observed in many years including those prior to the pandemic because of the “January is a fun month” mind-set among many workers following the Tet holiday. However, the resurgence of the Covid-19 pandemic just before the Lunar New Year has changed the usually observed uptrend compared to the same period of previous years. Usually, the labour force in the following year is always higher than the same period of the previous year due to population growth. However, the labour force in Q1/2021 was nearly 200,000 people lower than the same period last year and about 600,000 lower than the same period as when there was no pandemic attacking (i.e., in 2019).
The third wave of the Covid-19 pandemic in Viet Nam has slowed down the labour market recovery achieved in the last two quarters of 2020 and caused many workers, especially women, to become informally employed workers
In Q1/2021, the number of employed people aged 15 and over was 49.9 million, down 959.6 thousand from the previous quarter and 177.8 thousand people from the same period last year. The decrease was mainly in rural areas and among men (with the respective decrease of 491.5 thousand people and 713.4 thousand men compared to the same period last year).
In 2020, the strong surge of the Covid-19 pandemic caused a sharp decline in the labour market in the second quarter, with the number of employed workers decreasing from 50.1 million in the first quarter to 48.1 million, or by nearly 2 million people. In the next two quarters of the same year, due to effective measures in place and the relaxation of social distancing measures plus relief policies set out by the government, the labour market rebounded, with the employed workers increasing to 50.9 million, almost reaching the pre-Covid-19 level of 51.0 million. However, by Q1/2021, the resurgence of the Covid-19 pandemic with complicated developments on the occasion of the Lunar New Year has reduced the momentum of the previously achieved labour market recovery. The number of employed workers decreased to 49.9 million people, down 1.8% from the previous quarter and 0.36% from the same period last year.
The community transmission of the Covid-19 pandemic has affected 19.9% of workers in production and business establishments and 19.0% of workers in enterprises/cooperatives, mainly in the form of reduced earnings or working hours.
However, the Covid-19 pandemic has also contributed to changing working habits, promoting the application of information technology among workers to adapt to unpredictable developments of the pandemic. The labour force survey findings show that, in Q1/2021, more than 78,000 workers reported having changed from not applying information technology (IT) to using IT applications in the work, due to the Covid-19 pandemic.
In Q1/2021, the number of informal workers[2] was 20.7 million, an decrease of 251.7 thousand people over the previous quarter and an increase of 525.4 thousand people over the same period last year. The prevalence of informal workers in Q1/2021 was 57.1%[3], an increase of 1.1 percentage points from the previous quarter and 1.8 percentage points against the same period last year. This prevalence has increased significantly in rural areas (increased by 2.1 and 2.6 percentage points compared to the previous quarter and the same period last year, respectively) and among women (increased by 1.8 and 2.5 percentage points compared to the previous quarter and the same period last year, respectively).
The LFS findings also show that, although the number of employed people decreased, the number of employed women increased over the same period last year. However, this increase in women is mainly due to the increase in the number of informal workers, which makes the share of informal workers among women increase more strongly than that of men (by 2.5 percentage points versus 1.2 percentage points). This may be due to the gender-based impact of participating in the labour market under the effects of the Covid-19 pandemic: women are easy to compromise and do not have many opportunities to choose jobs when participating in the labour market compared to men; they have no choice but to accept less stable jobs as long as they can ensure earnings for themselves and their families.
The third wave of the Covid-19 pandemic broke out just before and during the Lunar New Year, increasing significantly the number of time related underemployed persons compared to the previous quarter and the same period last year
The number of time-related underemployed statutory working-age[4] persons in Q1/2021 was 971.4 thousand people; an increase of 143.2 thousand people against the previous quarter and an increase of 78.7 thousand people over the same period last year. The time related underemployment rate of statutory working-age persons in Q1/2021 was 2.20%; an increase by 0.38 percentage points against the previous quarter and 0.22 percentage points over the same period last year.
The underemployment rate of statutory working-age workers in Q1/2021 in the agriculture, forestry and fishery sector was 3.88%, the industry and construction sector 1.51%, and the service sector 1.76%. Although the agriculture, forestry and fishery sector still experiences the highest underemployment rate among statutory working-age workers, compared to the same period last year, the underemployment rate in this sector has decreased by 0.8 percentage points. Meanwhile, the rate in the industrial and construction sector has increased by 0.86 percentage points and the service sector increased by 0.31 percentage points. It is apparent that the resurgence of Covid-19 pandemic has caused the underemployment to spread to the industrial, construction and service sectors.
Average monthly wages by workers reached 6.3 million VND, increased compared with the previous quarter and the same period last year
The average monthly wages by workers in Q1/2021 reached 6.3 million VND, an increase of 339 thousand VND against the previous quarter and an increase of 106 thousand VND over the same period last year. Average monthly wages by male workers were 1.4 times higher than that of female workers (equivalent to 7.3 million VND compared to 5.2 million VND); average monthly wages by workers in urban areas were 1.5 times higher than that of rural areas (equivalent to 7.9 million VND compared to 5.4 million VND).
Despite the resurgence of the Covid-19 pandemic, the average wages by workers in Q1/2021 increased compared to the same period last year and increased in all three broad economic sectors. Average monthly wages by workers in the agriculture, forestry and fishery sector was 3.6 million VND, an increase of 181 thousand VND compared to the same period last year, workers in the industry and construction earned on average 7.2 million VND per month, an increase of 112 thousand VND and workers in the service sector earned 7.5 million VND, an increase of 55 thousand VND over the same period last year.
In Q1/2021 on the whole, compared to the same period last year, the agriculture, forestry and fishery sector recorded the highest growth rate in average wages, up 5.2%; the service sector witnessed the growth rate of 1.5% and the industry and construction sector had the lowest growth rate in average wages, up 0.8%.
Although the overall average wages increased, the growth was unevenly distributed across industries. Some industries are still subjected to severe impacts of the Covid-19 pandemic and the income earned by workers in that respective industry has declined compared to the same period last year. These include: art, recreation and entertainment, down 5.2% (down 359 thousand VND); transportation and storage, down 2.7% (down 234 thousand VND).
The average monthly wages among employees/salaried workers in Q1/2021 reached 7.2 million VND, an increase of 556 thousand VND against the previous quarter and 132 thousand VND over the same period last year. Male workers earned on average 1.2 times higher than female workers (with 7.6 million VND versus 6.6 million VND, respectively).
The number of unemployed people decreased compared to the previous quarter but increased over the same period last year; the share of youth not in education, employment or training (NEET) increased compared to the same period last year
The number of unemployed in statutory working-age persons in Q1/2021 was nearly 1.1 million, decreasing by 137.0 thousand people against the previous quarter and increasing by 12.1 thousand people against the same period last year. The statutory working-age unemployment rate in Q1/2021 was 2.42%, down 0.21 percentage points from the previous quarter and up 0.08 percentage points against the same period last year.
The share of youth not in education, employment or training (NEET) in Q1/2021 was 16.3%, equivalent to nearly 2.0 million young people, an increase by 0.9 percentage points, equivalent to 51,6 thousand people, over the same period last year. The NEET in both urban and rural areas and among both males and females all increased over the same period last year, with respective increases of 1.0; 0.7; 1.1 and 0.6 percentage points. Thus, the Covid-19 pandemic has jeopardized the ability of youth in their search for jobs as well as education and training, which has translated into the increase in NEET.
Currently, there is still a significant untapped potential labour force, especially the young one; the use of this group of workers has become even more limited in the context of Covid-19 pandemic
Labour underutilization[5] rate is an aggregate indicator that indicates the “mismatch” between the supply and demand of labour in the market, reflecting the redundancy in labour supply. In the context of normal economic development, the rate of labour underutilization always exists. This rate often rises when the market suffers from socio-economic shocks.
The rate of labour underutilization in Viet Nam all quarters of 2019 before Covid-19 stood just at 4.0%. However, the rate has started to increase when Covid-19 pandemic broke out in the country, accounting for 4.8% in Q1/2020 and reached the peak at 6.2% in Q2/2020 when the pandemic strongly attacked. As socio-economic activities gradually rebounded in the last 6 months of 2020, the rate of underutilized workers dropped to 4.4% in Q4/2020 and increased to 4.9% in Q1/2021 when the Covid-19 pandemic resurged.
Labour underutilization rate in Q1/2021 in urban areas was higher than that in rural areas (5.0% versus 4.9%); and that of male workers was higher than that of female workers (5.2% versus 4.6%). The majority of underutilized workers are those under 35 years old (53.2%), while those workers under 35 years old account for only 36% of the entire labour force. This shows that Viet Nam still has a significant part of the potential labour force that remains untapped, especially the young worker group. In addition, in the context of the Covid-19, it is increasingly crucial to create appropriate policies and measures to capture the full potentials among these workers.
In the whole economy, there are still 3.5 million workers engaged in subsistence work[6] in the agriculture, forestry and fishery sector. Women make up nearly two-thirds of this group
Subsistence workers are workers who produce goods or services which are predominantly consumed by themselves or their own households. Subsistence workers’ decisions on production are mainly geared towards themselves and their families, so they are often characterized by self-contained, non-profit nature and low efficiency and productivity. Therefore, as the economy and the scientific and technological revolutions evolve, this form of production is increasingly narrowed down. However, with a developing country such as Viet Nam, the prevalence of individuals who are doing these types of jobs in the agriculture, forestry and fishery sector still remains high.
Subsistence workers in Q1/2021 were estimated to be was 3.5 million people, accounting for about 4.7% of people aged 15 and over, an increase of 113 thousand people compared to the previous quarter and an increase of 84.7 thousand people over the same period last year. Most of these workers were concentrated in rural areas and nearly two-thirds of subsistence workers in Q1/2021 were women. Subsistence workers were mainly aged 50 and over (accounting for 59.4%). The highest share of subsistence workers in the population was in the 60-64 age group (9.9%). The data also shows that out of 3.5 million subsistence workers, more than 200,000 subsistence workers are currently being affected by Covid-19 pandemic (accounting for 5.8%).
The average weekly hours of housework[7] among subsistence workers was 16.4 hours (equivalent to about 2.3 hours per day). Not only did female subsistence workers do more housework than men, their average hours of work were also much higher than that of men. On average, female subsistence workers spent 19.3 hours per week in unpaid family work, compared with 11.3 hours for men.
Almost all subsistence workers do not have qualification attainment (93.5%). In the context of an increasingly high-skill-demanding labour market as well as severe impacts of the Covid-19 pandemic on the labour and employment situation, the chances for this group of workers to land a job in the labour market will become increasingly smaller.
3. Conclusions and recommendations
In concluding remarks, the statistical indicators on the labour and employment situation in Q1/2021 have uncovered the difficulties and fluctuations of the economy in general and the Vietnamese labour market in particular in recent years. These difficulties represent a huge challenge to the Government’s efforts to achieve the dual goal: economic development and victory over the pandemic. Against this backdrop, the General Statistics Office would like to propose a number of solutions to address difficulties for the labour market in the context of an unpredictable pandemic. These include:
– Actively research and immediately implement the issuance of vaccine passports, develop the necessary criteria to open the international tourism market to help the service sector in general and the tourism industry in particular not miss the opportunity to recover and develop. The development of these industries will attract a large number of workers, thus contributing to more effectively utilizing the available potential of the labour force.
– Currently, Viet Nam still has 3.5 million workers engaged in producing agricultural products for the main purpose of their own use and that of their families. About 93.5% of subsistence workers do not have any professional or technical qualifications and more than half of them are of working age. This is an extremely rich source of potential that can be utilized for development. Therefore, the State should implement specific policies to attract these subjects to participate in the labour market, contributing to improving social labour productivity in general on the on hand and helping to improve workers’ lives, on the other.
[1] Those negatively affected by Covid-19 pandemic include: job loss, furlough, suspension of production and business operations; reduced working hours/reduced work schedule; working alternate shifts, income reduction.
[2] Informal workers (also referred to as informal economy workers) refer to those who work in non-agricultural employment and those who work for agricultural, forestry and fisheries households with business registration, falling under one of the following four categories of work: (i) Family-contributing workers; (ii) Employers/owners and own-account workers involved in their own business production units in the informal economic sector; (iii) Salaried workers without labour contracts or with definite-term labour contracts but no compulsory social insurance contributions made by their employers on their behalf; (iv) Members of producer’s cooperatives without compulsory social insurance.
[3]If including workers work for agricultural, forestry and fishery employment households, the informal workers rate was 68.8%.
[4] Statutory working-age persons include, from 2020 and earlier, men from 15 to 59 years and women from 15 to 54 years; in 2021, men from 15 to 60 years and 3 months and women from 15 to 55 years and 4 months (according to the Labour Code 2019).
[5] Workers who have a need to work but do not have enough work (also known as underutilized workers/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 expressed by workers who have a need to work but do not have enough work as a share of the total workforce with a need for employment in the economy.
[6] Not to include employed persons who take on extra subsistence work.
[7] Housework includes: cleaning the house, washing clothes, cooking, buying food; production work for the household use such as making furniture, making clothes, weaving carpets, ..; self-repair, refurbishment and expansion of construction facilities of their households; taking care of, helping or supporting the family children and members of households with disabilities, sickness, old age,…