The number of new jobs created every year is low and most are poor-quality jobs. Recent studies of the Institute of Labour and Social Affairs (ILSA) and the International Labour Organization (ILO) show that the majority of labourers work in unofficial sectors or without wages or remuneration; with unstable employment rates even up to 76%.
Improved labour productivity and competitiveness is one of Vietnam’s challenges when participating in the production systems of the region and the world.
Labourers having jobs, qualified jobs, is an important platform to implement policies ensuring social security. In Vietnam in recent times, the economy grows fast but the new employment rate is low. ILSA research results show that the elastic coefficient of employment of VN is only 0.28% (per 1% of economic growth, the rate of new jobs generated is only 0.28%). This rate is much lower compared to other regional countries such as Brunei, 1.27%, and Singapore and the Philippines at 0.58%.
Labour productivity (LP) is an important factor for economic growth, rising wages and reduced long-term poverty. ILSA reported that employment in agriculture declined from 65.3% in 2000 to 52, 2% in 2007, because labourers moved to work in industries and services. Although the shift to these areas with higher productivity has helped to raise by 5.1% overall labour productivity per year, still, labour productivity is generally quite low. Compared with other countries in the region, Vietnam’s LP is only 61.4% of the ASEAN average, 22% that of Malaysia and 12.4% that of Singapore.
“During the past time, although Vietnam has achieved high economic growth rates, the assurance of social security is far from the economic growth,” said Dr Nguyen Thi Lan Huong, Director of Labour and Social Studies Institute. According to her analysis, this is a result of capital and labour-intensive growth. Capital is poured more into state enterprises, but the rate of new jobs created in this area is lower than other types of businesses.
Labour-intensiveness is seen in investment attraction to many industries including textile-garment, leather footwear and fisheries, but creates lower quality jobs with low wages, poor conditions of working. Meanwhile, non-state sector enterprises play an important role in creating jobs. Labourers in this sector account for 90% of employment.
Therefore, in Ms Huong’s opinion, along with comprehensive social security strategy to help people cope with risks, a flexible labour market is required to support labourers in adapting to the uncertainties on employment and wages. In order to improve labour productivity, the government should continue creating a favourable environment to support labour shifts among economic sectors through the maintenance and development of industries with high productivity and more labour attraction.
Moreover, it is necessary to strengthen policies encouraging and promoting investment in small and medium enterprises to support these enterprises in applying modern technology and developing human resources. The most important economic growth strategy is job creation in high labour productivity sectors and measures promoting the shift from the agricultural sector to the industrial and service sectors, and from unofficial to official sectors.
(By Business News)