Eco205 - Coolest Group - Report PDF

ECO 205:
PRINCIPLE OF MACROECONOMICS
The job market in Vietnam - a

period of the Covid-19
pandemic
Which sector should be immediately addressed
immediately to reduce the unemployment rate
and recover the economic growth in Vietnam?
Lecturer: Mr. Nha Le
Group: “COOLEST”
Quarter I, 2020-2021
12/24/2020
The job market in Vietnam - a period of the Covid-19 pandemic 2020
Abstract
This article analyzes that Covid-19 has affected the entire economy of the world. In
Vietnam, there is no exception, a series of businesses are affected, compared to the impact of the
Covid-19 pandemic among agriculture, industry, and services. From the beginning of 2020, there
are more than 44,400 enterprises temporarily suspending their business, increasing nearly 60%
over the same period last year. About 33,600 enterprises stopped working waiting for dissolution
procedures and more than 15,400 enterprises completed dissolution procedures. (Nguyen Nga,
2020) On the other hand, an increase in the number of large established enterprises operating in
several other industries is also being recorded. For example, the field of delivery and sales
through e-commerce increased sharply. (Nguyen Nga, 2020) However, the unemployment rate is
still higher than normal. Therefore, what measures has the government taken to address this
situation in the short and long term?
Keywords: The Covid-19, pandemic, agriculture, industry, service, unemployment rate,
government
ECO 205_Group: “COOLEST”

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Table of Contents
Summary .......................................................................................................................................... 3
Introduction ..................................................................................................................................... 3
The overview of the Vietnam economy in 2020 .............................................................................. 4
The job market in the Agriculture sector ......................................................................................... 6
Vietnam’s Agriculture sector ........................................................................................................... 6
The Industry sector .......................................................................................................................... 8
The Service sector .......................................................................................................................... 14
Resolutions for unemployment from the government. ................................................................ 17
The opportunities of the Vietnamese labor force after the Covid-19 pandemic. ......................... 20
Recommendations ......................................................................................................................... 20
Conclusion ...................................................................................................................................... 21
REFERENCES ................................................................................................................................... 22

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Summary
The Covid-19 affected the entire economy of Vietnam. A series of businesses from the
beginning of 2020, with more than 44,400 enterprises temporarily suspending their business,
increasing nearly 60% over the same period last year. 33,600 enterprises stopped working
waiting for dissolution procedures and more than 15,400 enterprises completed dissolution
procedures. On average, there are 8,500 enterprises withdrew from the market each month.
(Nguyen Nga, 2020) the impact of the Covid-19 pandemic on the service sector is greatest,
followed by industry and agriculture. On the other hand, an increase in the number of established
enterprises operating in several other industries is also recorded. For example, the field of
delivery and sales through e-commerce increased sharply. There are nearly 124,300 newly
registered enterprises, in particular, and has 40,800 enterprises resuming, an increase of nearly
11% over the same period last year. (Nguyen Nga, 2020) In the short term, the government has
an extension for payment of taxes, open packages of unemployment benefits, and interest-free
loans to businesses. Besides, the government has launched training programs to improve skills
while on translation leave to meet the needs of businesses moving to Vietnam after the Covid-19
to reduce the long-term unemployment rate. However, the unemployment rate is still higher than
normal. The government should focus on supporting services and industry, the industry with a
high GDP contribution, which will be affected much after that is agriculture. This is because
only when enterprises stabilize development can make the domestic unemployment rate decrease.
Introduction
In 2020, it is the highest unemployment rate in the past 10 years. The rate of unemployed
and not participating in study or training increased, including the number of unemployed people
of working age in the second quarter of 2020 was nearly 1.3 million people, an increase of 192.8
thousand people compared with the first quarter and increased by 221 thousand people over the
same period of 2019. Employed workers decreased sharply compared to the first 6 months of
2019. Employees' income decreased and unemployment increased, manifested in numbers. The
number of unemployed people of the working-age in the first 6 months of 2020 is nearly 1.2
million people, an increase of 123.9 thousand people over the same period in 2019. The

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unemployment rate of working age in the first 6 months of 2020 is 2.47%, 1.14 times higher than
in the same period in 2019. (Le Nguyen, 2020)
The overview of the Vietnam economy in 2020

Vietnam has been significantly affected by the Covid-19 pandemic.
Through 35 years of renovation (1986-2020), Vietnam’s economy has achieved many
great achievements. Economic growth is always positive, poverty is reduced and people’s
income and living standards have been improved. However, in the first six months of 2020, the
Covid-19 has brought challenges, and which are expected to have a significant impact on
Vietnam’s economic development. Although the Covid-19 affected many areas of Vietnam’s
economy, it focused on two factors: supply and demand. It affected demand because the
domestic consumption decreased rapidly due to the implementation of compulsory social
distancing to prevent and control the Covid-19.
In Ho Chi Minh City, many retail stores, restaurants, shopping mall had the number of
customers fallen rapidly. “According to the statistics of retail in Ho Chi Minh City, the number
of visitors to shopping centers and supermarkets has fallen from 40-50% compared to before.
The number of customers who come to restaurants also decreased by 20-30% on weekdays and
50% during the weekend. This results in a 40% decrease in sales at department stores” (An
Overview, 2020). Almost all stores are trying to maintain their business by offering appealing
promotions and promoting the door-to-door delivery service and it brings opportunities for
online shopping because people just want to stay at home and order items. On the other hand,
necessary food products such as rice, noodles, milk, especially the facemask, and “immune-
boosting” products such as lemongrass, lemon, honey, turmeric, black garlic, are thriving.
Moreover, homeowners and property owners reduced 20% - 40% of the rent house fee, and
others offered a free month for poor people during the Covid-19. “According to the Ministry of
Planning and Investment, due to the impact of the Covid-19 pandemic, consumers are avoiding
shopping in public places and the total retail sales of goods and revenue from consumer services
in February 2020 dropped 7.9% compared to the previous month.” (An Overview, 2020).
Furthermore, a lot of schools and universities have closed until Mid-March to prevent the
Covid-19. It affects the education system and many teachers would lose their jobs. Aviation is

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one of the affected industries from the Covid-19 outbreak, “As of February 26th, Vietnamese
airlines have cut all flights to China, 92% of flights to Hong Kong, 41% to South Korea, and 34%
to Taiwan. In particular, Chinese travelers account for 26.1% of the international transporting
volume of Vietnamese airlines. Vietnam’s Aviation Department also calculated revenue of
domestic airlines would expect to reduce more than USD 1.08 billion”. (An Overview, 2020).
Cutting flights means tourism is affected heavily; many hotels are closed and dismissed
their employee. “According to the GSO, accommodation, and catering, services businesses and
tour operators have suffered the hardest blow from Covid-19. In the first nine months, the
number of enterprises in accommodation and catering services suspending business for a definite
period was 2,414, up 120.3% year-on-year. Up to 2,320 businesses in employment services,
support, and travel have closed, up 109.4%” (Nhat Minh, 2020). “Exports and imports of
agricultural goods saw a decline in the first five months of 2020 due to the negative impacts of
the COVID-19 pandemic, according to the Ministry of Agriculture and Rural Development
(MARD)’s monthly report last week. The export value in the first five months of 2020 saw a
decline of 4.1 percent year-on-year and was valued at US$15.5 billion.” (Vietnam’s agricultural,
2020).
The job market has changed in Vietnam by the COVID-19 pandemic.

Because of “social isolation”, which impact too much on the job market, many workers
lose their jobs or have working hour reduced. “Up to 1.4 million lost their jobs, mostly in the
processing, retail, logistics, and hospitality sectors, according to data released on Monday by the
Ministry of Labor, Invalids and Social Affairs.” (Dat, 2020) In many companies, a layoff is a big
problem for workers and companies, workers felt worried and disappointed because they must
stay at home and do not have money to live in the next days. Besides that, many companies say
that their revenue reduced rapidly, and some companies temporarily stopped their operation. For
example, “Another city footwear company, Hue Phong Footwear Jsc, cut its workforce of 4,600
by half. Woodworth Wooden Industries Vietnam also lay off 2,000 workers. The number of
businesses temporarily suspending operations was 29,200 in the first half of the year, up 38.2
percent.” (Dat, 2020) The high unemployment rate means that the government must bear
unemployment benefits for employees. Compare to the previous year “The government has paid

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VND7 trillion ($300 million) in benefits, a 40 percent increase.” (Dat, 2020) People working in
agriculture, forestry, and aquaculture said they were also affected by the pandemic and many
graduate students are very difficult to find new and good jobs during the Covid-19 outbreak.
The job market in the Agriculture sector

The pandemic has threatened Vietnamese farmers.
The Covid-19 also has a significant effect on the agriculture industry of Viet Nam.
According to the Ministry of Agriculture and Rural Development “Export value in the first five
months of 2020 saw a decline of 4.1 percent year-on-year and was valued at US$15.5 billion”.
Especially, a sharp fall saw in rubber, tea, and pepper while coffee, rice, and vegetables were the
strongest export growth. China is Vietnam’s largest exporting market of agricultural products,
with export turnover at $3.7 billion, a 15.5 percent drop in value, closely followed by the US and
the EU, reaching $3.4 billion and $1.6 billion, respectively. Fresh fruit, vegetables, and aquatic
products are the most affected. Many families tend to tighten their income while goods could not
be exported due to border closures. The selling prices of beef and banana also decreased by 21.4
percent and 57.3 percent, respectively. Production costs increased by 3-25 percent, leading to the
businesses' revenue dropping by 30-82 percent.
Especially, the small-scale farmers are strongly threatened. The spread of the COVID-19
pandemic was forced governments to restrict many daily activities of their citizens. During the
stage of social distance, Vietnam was locked down and people were isolated in their homes.
Most of the businesses were also closed include the informal markets and street vending.
However, the suppliers in these markets mostly come from small-scale farmers. As a result, they
were highly suffered from the Covid-19 while unable to generate income.
Vietnam’s Agriculture sector

Export agriculture
China, the US, EU are the biggest export markets of Vietnam in terms of agricultural
products. Due to the spread of COVID-19, the supply chain has become more challenging.
Consequently, agricultural products saw a decrease in the number of exporting which hits

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Vietnam’s agriculture industry during January. A decrease of 33% exporting in the US, 32% in
China and the EU was 28%. However, until February of 2020, the exporting rate of agricultural
products has significantly increased.
Supply chain
During the pandemic, the transportation has become challenged, A decrease in the
production, the logistics is disrupted, and because of falling in the consumption, many of the
agricultural types are unsold, even need to destroy. Besides, due to the challenge in distribution
and delivery, there is an increase in the price of products when it arrives at customers.
A decrease in income
COVID-19 has brought the economic crisis globally, and Vietnam is not an exception.
Many of the companies have faced the challenges of finance. To maintain the company, they
fired thousands of employees. The remaining receive a reduction in the salary due to the flexible
working schedule. According to BBC “30% of companies choose to lay off their employees, 21%
of companies let their employees off without paying salary and 19% reduce the salary of their
employees”. To react to this situation, the employees choose to cut their spending on many
categories including agriculture products.

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The pandemic affected largely the labor force in the Agriculture sector.
Covid-19 has hit the job market significantly and will continue. The Service sector has
been hardest hit by Covid-19, with 68.9% of workers affected, followed by the 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%. From the beginning of 2020 up to
now, due to the COVID-19 19 epidemic, production and business activities in the fields of
business and rural craft villages have been greatly affected, affecting the income and life of rural
people. The disease disrupts the supply chain of raw materials; Trade promotion, craft village
tourism, product introduction, and export of handicraft products faced many difficulties. Many
businesses, production, and business establishments were suspended or canceled contracts,
causing great damage to production. Employees in production establishments are underemployed
and unemployed, and the average income of workers has fallen sharply.
The Industry sector

The pandemic also poses a challenge to Vietnam's rapidly growing economy. Vietnam -
one of Southeast Asia's most stable and rapidly growing economies has coped with the COVID-
19 outbreak quite successfully and maintained economic growth, albeit. Forecasts before the
pandemic suggest that Vietnam's GDP growth this year will reach 6.8%, but in the second
quarter of 2020, it has fallen to 0.36% (a good indicator in the context of the pandemic but it is
the worst rate for the Vietnamese economy over the past 35 years). (Tác động, 2020)
According to Forbes Vietnam, (2020) a prominent feature of the Vietnamese economy in
the recent decade is the consolidation and development of relations with other countries through
trade and investment. In 2019, Vietnam's export turnover increased by 37.48 billion USD
compared to 2018, largely because companies are aiming to diversify their production and
supply chains in the context of the trade war between the US and the US. China. However, the
pandemic reduced demand on all fronts, which also affected Vietnam's exports. According to the
General Statistics Office of Vietnam, in the first half of 2020, the country's exports decreased by
1.1% from the previous year to the US $ 121.21 billion and imports - dropped 3.0% to $ 117.17
billion, which leading to a trade surplus of 4.04 billion USD.

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On the positive side, in the first 8 months of 2020, there were 88,700 registered business
establishments, down 2% compared to the same period last year. The impact of Covid-19 on the
business of enterprises gradually showed that over the past eight months, the number of
enterprises temporarily suspending their business for a certain period increased to nearly 34,300,
an increase of 70.8% over the same period last year. According to the latest socio-economic
status update data of the General Statistics Office for the first eight months of the year, Vietnam
recorded 24,200 enterprises shut down waiting for dissolution procedures; 10,400 enterprises
completed dissolution procedures, including 9,200 businesses with capital size below 10 billion
VND, 168 enterprises with a capital scale of over 100 billion VND. (Giang, 2020)
Table 1. The number of businesses temporarily shut

down in the eight months of 2020.
Agriculture, forestry and
1% fisheries
28%
Industry and construction
71%
Service
Based on the General Statistics Office of Vietnam (2020), the time since the beginning of
the economic recovery process and the implementation of measures to support the business
community has been negligible up to now and the epidemic in the world is still complicated.
Therefore, the percentage of firms withdraws from the market 8 months of the year tends to
increase. In the first 8 months of 2020, there are 68,856 enterprises to withdraw from the market,
which has 34,288 registered enterprises suspend business term (up 70.8% over the same period
in 2019, 4.3 times more than with an average increase of 22.7% from 2015 to 2019 period), now
pending dissolution 24,215 (down 5.9% compared to the same period in 2019, lower than the
average increase of 14.75% in the period from 2015 to 2019 ), 10,353 enterprises complete
dissolution procedures (decrease 1.9%) compared with the same period in 2019, an average
increase of 14% from 2015 to 2019 period). On average, each month there were 9,249
enterprises withdrew from the market, an increase of 15.9% compared to the average of 8

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months of 2019. As can be seen, the Covid-19 translation has affected the business community
and is the main cause of the reversal in this direction.
The enterprise registered to suspend business for a definite period.

According to historical data, the average rate of increase in enterprises registering to
suspend a business with a term of 8 months annually in the period 2015-2019 is 22.7% on
average. However, the number of enterprises registering to suspend their business in the first 8
months of 2020 is 34,288, up to 70.8% over the same period in 2019. This is the highest increase
in the number of temporary registrations, which suspending business in the 8-month periods of
2015-2020, demonstrating the great influence of the Covid-19 epidemic on the business
suspension of the enterprise. (Bộ kế, 2020)
According to the Ministry of Planning and Investment (2020), the number of enterprises
suspending business with operation time from 5 years or less is 16,615 enterprises (accounting
for 48.5%); The number of enterprises suspending their business operation with a period of 5 to
10 years was 9,765 (accounting for 28.5%) and the number of enterprises temporarily suspended
business with 10 years or more of operation time was 7,908 enterprises (23.1%).
One noteworthy point is that compared to the same period in 2019, the number of
businesses temporarily suspending their business with deadlines increased sharply in all 17 areas.
In which, some areas where businesses are facing difficulties with the highest rate of business
suspending compared to the same period in 2019 are: Real estate business (923 businesses, up
136.1 %); Education and training (612 businesses, up 95.5%); Accommodation and catering
services (1,918 businesses, up 89.7%); Employment services, tourism, machinery and equipment
rental, equipment and other support services (1,927 businesses, up 85.5%); Arts, entertainment
and entertainment (248 businesses, up 77.1%); Other service activities (445 businesses, up
76.6%); and Science and Technology; design consulting services; advertising and other expertise
(2,015 businesses, up 61.3%). These are the areas most affected by the epidemic seriously
Covid-19.
By capital size, enterprises registered to suspend business mainly focused on a capital
scale from 0 - 10 billion VND with 31,362 enterprises (accounting for 91.5%, up 68.7% over the
same period in 2019). The number of enterprises registered to suspend business increases in all

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capital sizes, specifically: There are 1,727 enterprises (accounting for 5.0%, up 108.1% as
compared to the same period of 2019) for 10-20 billion VND. ); In the capital scale of 20 - 50
billion VND, there are 756 enterprises (accounting for 2.2%, up 84.4% over the same period in
2019); In the capital scale of VND 50-100 billion, there are 273 enterprises (accounting for 0.8%,
up 73.9% over the same period in 2019) and over 100 billion VND are 170 enterprises
(accounting for 0.5%, up 97.7% over the same period in 2019).
The enterprise suspends its operation waiting for dissolution procedures.

In the first 8 months of 2020, the number of enterprises suspending operations pending
dissolution is 24,215, a decrease of 5.9% as compared to the same period in 2019. While the
increased rate of enterprises suspending operation waiting for procedures The annual dissolution
of the 8 months in the period 2015-2019 has an average increase of 11.1%. The main business
lines with the largest number of businesses waiting for dissolution are: Wholesale and retail
(8,990 businesses, accounting for 37.1%); Processing and manufacturing industries (2,800
enterprises, accounting for 11.6%); Construction (2,603 enterprises, accounting for 10.7%).
By capital scale, enterprises that registered to suspend operations pending dissolution
mainly focused on a capital scale from 0 - 10 billion VND with 21,713 enterprises (accounting
for 89.7%, down 7.5% over the same period). period of 2019). The number of businesses waiting
for dissolution increased in 4/5 capital scale, specifically: On the scale of 10-20 billion VND,
there were 1,234 enterprises (accounting for 5.1%, up 15.8% over the same period in 2019). ; In
the scale of 20 - 50 billion VND, there are 663 enterprises (accounting for 2.7%, up 2.8% over
the same period in 2019); In the capital scale of VND 50 - 100 billion, there are 296 enterprises
(accounting for 1.2%, up 7.2% over the same period in 2019) and over 100 billion VND there are
309 enterprises (accounting for 1.3%, up 11.6% over the same period in 2019).
Enterprise completed dissolution procedures.

The number of enterprises completing dissolution procedures in the first 8 months of
2020 is 10,353 enterprises, a decrease of 1.9% compared to the same period in 2019. In the first
8 months of 2020, the majority of dissolved enterprises have operating time. Short, specific: The
number of dissolved enterprises with an operating time of 5 years or less is 7,116 (accounting for

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68.7%), the number of enterprises that have completed dissolution procedures with an operating
time of 5 to 10 years, there are 1,927 businesses (accounting for 18.6%) and the number of
businesses with 10 years or more of operation is 1,310 businesses (accounting for 12.7%).
The nine in seventeen main lines of business have an increased number of dissolved
enterprises. The fields with a high increase in the rate of dissolution of businesses compared to
the same period in 2019 are Real Estate Trading; Production, distribution, electricity, water, gas,
and Education and training with growth rates of 59.0% respectively; 40.9% and 30.3%.
By capital size, enterprises completing dissolution procedures, mainly focusing on capital
scale from 0 - 10 billion VND with 9,164 enterprises (accounting for 88.5%, down 3.8% as
compared to the same period in 2019). In 4/5 remaining scale of capital, the number of
enterprises completing dissolution procedures was recorded to increase, specifically: On the
scale of 10-20 billion VND, there were 564 enterprises (accounting for 5.4%, an increase of 16). ,
8% over the same period in 2019); In the scale of 20 - 50 billion VND, there are 314 enterprises
(accounting for 3.0%, up 18.9% over the same period in 2019); In the capital scale of VND 50 -
100 billion, there are 143 enterprises (accounting for 1.4%, up 10.0% compared to the same
period in 2019) and at the scale of over 100 billion VND there are 168 enterprises (accounting
for 1.6%). , up 11.3% over the same period in 2019).
From the above analysis, it can be seen that young, small-scale businesses are very
vulnerable to the impact of the epidemic. Therefore, the upcoming policies need to pay attention
to this object.
According to Ms. Anh (2020), manufacturing enterprises in Vietnam are blamed for
Covid-19, it is not uncommon for garment, seafood, and furniture companies to announce the
termination of labor contracts for employees. Millions of employees have been directly affected;
many of them have to let their employees quit their jobs. Facing the above situation, leaders of
many businesses are trying to use all means to get their employees jobs and income maintenance.
Translation not only causes enterprises to lack raw materials for production and cannot sell
goods, but many businesses have to change their production methods to meet the new era.
Therefore, in the coming time, many businesses may lay off a large number of employees,
especially in the outsourcing, service, and chain production sectors will be affected.

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For example, Dong-A company (Tan Thuan), specializing in the production of

mannequins (the photo to submit models) had to file a bankruptcy notification, so more than
1,000 workers fell into unemployment. At PouYuen Vietnam Co., Ltd (Binh Tan District)
specializes in manufacturing sports shoes, garments at peak period the company has over 64
thousand workers. Due to the disease impact, the company has cut nearly 3,000 workers.
According to the representative of PouYuen Vietnam Company, the company currently has over
62,000 employees. Due to the influence of the Covid-19 translation, from the beginning of
February 2020, many orders of the company were cut, making the company's operations difficult.
From the past 5 months, the company has implemented many measures such as production
dispatching, arranging workers to take turns waiting for work. Hue Footwear Company (Go Vap
District) also cut 4,023 employees, divided into 3 phases: the first time was 2,222 people; Phase
2 was 224 people and phase 3 was 1,577 people. Explaining the reduction of staff, the
representative of Hue Leather Shoe Company said that, due to the influence of the Covid-19
epidemic, the company's main customers in the US and Europe were severely damaged, so they
canceled their orders. Facing these difficulties, the company was forced to reduce production,
continue to reduce workplaces, and cut 1,577 workers on August 30, of which 198 female
workers are pregnant. (Anh, 2020)
The number of cases and deaths caused by Covid-19 in Vietnam is much lower than in
most of the world due to its early and positive anti-pandemic response. However, this does not
mean that the impact of the pandemic on Vietnam is less severe. Vietnam adopted a support
package for $ 2.66 billion for those affected by the virus and slow tax collection, land use fees to
support the businesses. Vietnam is also encouraging localities, businesses, and trade promotion
organizations to develop online marketing measures and e-commerce activities and promote the
application of IT in their operations. (Minh, 2020)
With approximately 63.6 million Internet users in Vietnam and a 20% increase in online
shopping as of March 2020, e-commerce businesses are seeing a rising demand that could
encourage them. Indeed, in Vietnam, pandemic Covid-19 has brought new opportunities for
businesses in the development of test kits and personal protective equipment. (Minh, 2020) It
also opens up many opportunities for online businesses in Vietnam.

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The Service sector

Covid-19 is a dangerous pandemic causing a terrible impact on society, people, and
especially the economy. For Vietnam, a developing country, the economy is also severely
affected - especially the service industry.
Vietnam used to own a low-tech manufacturing industry, then gradually has oriented to
the service economy and increasingly attractive. This has partly been encouraged by the growth
of Vietnam as a regional market for domestic enterprises to have more opportunities for
development in the world.
According to the General Statistics Office of Vietnam, the results for the first quarter of
2020 announced that Vietnam's economy was in recession due to the influence of Covid19. The
two service industries most severely affected are tourism and hotels. However, for exports,
Vietnam has still increased slightly compared to the same period in 2019. The effects of Covid-
19 epidemic on each region have different degrees of impact. For Vietnam, the central region
was most strongly influenced, especially in Da Nang city, when foreign direct investment (FDI) -
especially tourism - fell 80% compared to last year.
After the pandemic of the Covid-19 outbreak, two cases in which the Ministry of
Planning and Investment have discussed for the service sector includes as well that the disease

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control in the second quarter of 2020, is expected to service field will increase to 6.47%. It
means that after quarter two if we have controlled the epidemic well, this field will have an
increase in growth rate and have a good impact on people which create more jobs for them.
The 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 over the same period last year. Employment in urban areas increased
by 471.0 thousand people against the previous quarter and down to 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 people against the previous quarter and 1.2 million people against the same period
last year.
Meanwhile, a survey from the General Statistics Office released in early July revealed
that more than 30.8 million people aged 15 and above have been adversely affected by COVID-
19 in the first six months. The service sector hit the hardest, with 72 percent of people either
losing their jobs or having their wages seriously cut.
In the third quarter of 2020, the service sector accounted for 24.8%, up 8.5 percentage
points. The rate of underemployed workers in the third quarter of 2020 in the service sector is
1.85% (up 1.15 percentage points over the same period last year).
On average, in the first 9 months of 2020, the average income of employees decreased by
1.5% compared to the same period last year (corresponding to a decrease of 83 thousand VND).
The income of workers in most industries decreased, in which the biggest drop was in
administrative activities and support services (down by 6.5%), accommodation and catering
services (down by 6.5%), transportation and storage (down 4.9%). Also, some industries have
increased income such as information and communication (up 1.7%), health and social work (up
3.3%). Moreover, in the first three quarters of 2020, industries with a sharp decrease in the
number of employees include: air transport and tourism by 30.4%; accommodation service rose
29.9%; sports, entertainment and entertainment by 17.4%; food and beverage by 15.4%; the
construction industry increased by 14.1%.
A third of enterprises participating in the quick survey said they had to take measures to
reduce their workforce. Air transport, travel, and accommodation services saw the biggest
number of job cuts. The Covid-19 pandemic had a strong impact on enterprises' operations,

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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 forecasted that by the end of 2020, the rate of enterprises applying the
payroll reduction measure may reach 36.4% over the same period last year.
Additionally, as of September 2020, the Covid-19 pandemic has affected employees
working in almost all industries, some of which have seen large proportions of those affected.
Workers in some service industries such as art, entertainment and entertainment (88.6%),
accommodation and catering operations (81.7%), transportation and storage (79.7%),
administrative and supporting activities (72.7%), manufacturing (70.1%), wholesale and retail
business, automobile and motorcycle repair (68.5%), education and training (68.5%), real estate
(67.8%), strongly influenced by Covid-19.
Among employees working in enterprises surveyed as of September 10, 2020, 7.8%
receive a salary reduction, 5.0% take a rotating leave/work on a rotating schedule, and 2 4%
work part-time. The percentage of employees with the highest salary reduction in enterprises in
the air transport industry is 99.5%, followed by the tourism industry with 43.2%, followed by
accommodation services with 27.8%.
According to the World Bank, risk-averse households will tend to restrict their
investment and consumption plans, while exporters will be subject to restrictions on international
mobility and income globalization decreased due to instability with the domestic and
international context of the Covid-19 period. For example, Vietnam's tourism industry has the
potential to miss 20 million foreign tourists expected to visit Vietnam by 2020. Meanwhile, the
manufacturing industry - a major source of urban employment - will face a further decline in
orders from abroad. Besides, all exported manufactured goods - with the notable exception of
computer components - have declined over the past six months with this negative trend
accelerating in the most recent months.
Therefore, the Vietnamese government should lock down the service industry for this
hard time, and also have an appropriate detailed policy to recover the service economy, notably
tourism and hotels, as these two industries account for a high share. In the raging, dangerous, and
difficult-to-control Covid19 epidemic, the authorities should limit crowded services; take
precautionary measures such as wearing a mask, limiting contact at close range, washing regular
antimicrobial hands to prevent Covid-19 more effectively.

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Resolutions for unemployment from the government.

Covid-19 pandemic is one of the huge crises in recent decades. This will bring many
negative consequences for the world and Vietnam particularly. In the first six months of 2020, in
Vietnam, there are more than 30 million workers affected by the pandemic, most of them, nearly
18 million people, received less salary than before and the rest (about 900,000 workers) has been
out of work. (Vietnam says, 2020) This has led to an increase in the national unemployment rate.
The living standards will decline if the government is unable to carry out the solution to address
the employment issue for citizens. Thus, the Vietnamese government has immediately
implemented many policies and incentives to resolve the negative impacts of job loss, which
influenced life’s residents. To resolve the issues related to unemployment, the government
should focus on recovering the national economy, first.
Figure 1. The diagram of the Government's solutions to support the unemployed.

(Source: COVID-19 Employment Crisis in Vietnam: Global Issue, National Solutions.
https://doi.org/10.3389/fpubh.2020.590074)

Page 17
Following the diagram, the authority attends to encourage economic growth and reduce
the national unemployment rate based on three categories: the general solutions, the urgent
solutions, and the long-term solutions.
The general solutions
Regarding general solutions, the government should consider developing a business
environment and make full use of the domestic market. Over the past decade, economic growth
in Vietnam depends mostly on trade and investment from other countries. Thus, to improve the
national economy after the Covid- 19 pandemics, there are “two of the major drivers that have
been essential for the previous growth and economic development are: (1) the level of foreign
direct investment in the country, and (2) the country’s capacity for export” (COVID-19 Impact
Assessment, n.d). The Europe- Vietnam Free Trade Agreement (EVFTA), which officially took
effect from August 1, 2020, contributes to the recovery of exports to Europe, especially the
Regional Comprehensive Economic Partnership Agreement (ACEP) which will take effect in the
next 18 months, will bring many opportunities for export, investment, and tourism. At the same
time, it is an important factor to continue promoting the process of reforming and perfecting
Vietnam's economic institutions in the coming time (Ha Chinh, 2020). By encouraging foreign
investors and increasing the number of exporting goods and services, it results in creating more
jobs for the labor force, which will make the unemployment rate fall.
The urgent solutions
The urgent solutions are considered as short-term solutions. The living standards are
directly influenced by the high unemployment rate. Thus, the authority has carried out many
temporary policies and incentives to reduce negative impacts. Base on the diagram (Figure 1),
there three directions to implement solutions efficiently: extension for payment of taxes and
other duties, financial assistance for businesses and individuals, and stimulating consumption.
However, “the policy on extending the time for corporate income tax payment is not significant
because many enterprises have no revenues caused by the pandemic, so they cannot pay it” (Van,
H., 2020). Regarding the financial assistance, according to Resolution No. 42/NQ-CP, the
government allocated a financial package of about US$ 120 million per month to help the
unemployed individuals. Also, the businesses can borrow money from the Vietnam Bank for

Page 18
Social Policies (VBSP) with 0% interest rate and collateral-free, following the Labor Code
(Thang Vu, 2020). However, more than 90% of enterprises said they could not reach the
financial support package in Covid-19. The procedures to prove the capacity or not to lend is a
"forest", waiting to prove it, the enterprise has "died" as we can see (Nguyen Nga, 2020). Thus,
the government should have a long-term plan to recover the national economy. Besides, the
government has applied many incentives to stimulate the consumption of tourism. The tourism
stimulus policy is a golden opportunity for tourists to explore Vietnam's top tourist destinations,
the opportunity to introduce many unknown tourist destinations. But the demand stimulus is not
simply reducing prices, enterprises must commit to increase service quality, renew existing
products and ensure safety and health criteria (Tam, T., Huong, L., & Anh, D., 2020). By doing
these things, companies that are temporarily closed have a chance to resume and people have
jobs to earn the living.
The long-term solutions
From 2010 up to now, the overall unemployment rate of the country has remained below
3%, the unemployment rate in urban areas is below 4%. However, the labor market still has
shortcomings and shortcomings such as the quality of jobs, the quality of the labor force is still
low, and there is a lack of highly qualified technical workers, workers in some new industries.
Up to now, although the rate of trained workers with certificates and diplomas has increased, it is
still very low, only reaching over 23.68% (Chất lượng lao động, 2020). Thus, the government
should focus on training the labor force. Following the innovative project, the government
attends to reach many goals to improve the labor force in Vietnam. The rate of trained workers
with degrees and certificates will reach 30% by 2025 and 35% -40% in 2030; creating productive
jobs and better jobs for workers, the overall unemployment rate remains below 3%, the urban
unemployment rate is below 4%; the annual growth rate of labor productivity reaches at least 6.5%
/ year (Chất lượng lao động, 2020). Also, the government should concentrate on innovating
technology and science and create a new business model to generate more opportunities for
enterprises and individuals.

Page 19
The opportunities of the Vietnamese labor force after the Covid-19

pandemic.
Although the Covid- 19 pandemic has many adverse effects on economic growth, it also
creates many opportunities to develop a new model business, the e-commerce industry. The
Industrial Revolution 4.0 and the Covid-19 pandemic have created huge "pushes" for Vietnam's
e-commerce market to accelerate its comprehensive development, with the number and value of
e-commercial transactions more soon (Dieu Thien, 2020). For example, the field of delivery and
sales through e-commerce increased sharply. At the same time, Ho Chi Minh City had 37,548
newly licensed enterprises with a total registered capital of 947,346 billion VND, a decrease of
7.37% in number but an increase of more than 58% in registered capital compared to the same
period last year. The country has nearly 124,300 enterprises registered for a new establishment,
especially, the whole country has 40,800 enterprises returning to operation, an increase of nearly
11% over the same period last year (Nguyen Nga, 2020). It results in creating a large number of
jobs, which turns into a decrease in the unemployment rate.
Recommendations
In Vietnam, the Covid-19 pandemic has negatively affected the whole economy. “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%” (General Statistics, n.d).
The GDP growth in 2019 reached 7.02%, exceeding the target set by the National Assembly by
6.6 - 6.8%, confirming the timeliness and efficiency of the solutions promulgated and drastically
directed by the government. All levels, sectors, localities and business communities work
together to achieve and exceed the growth target. In which, the agriculture, forestry and fishery
sector increased by 2.01%, contributing 4.6% to the general growth; industry and construction
increased by 8.9%, contributing 50.4%; service sector increased by 7.3%, contributing 45%. In
terms of economic structure, the agriculture, forestry, and fishery sector account for 13.96% of
GDP; industry and construction accounted for 34.49%; the service sector accounted for 41.64%;
Product tax minus product subsidies accounts for 9.91% (Kinh tế Việt Nam, 2020). Thus, the

Page 20
government should focus on addressing the Services sector and Industry and Construction sector.
This is because these two sectors have significantly been affected by the Covid -19 pandemic,
but they have mostly contributed to the whole GDP in Vietnam. Besides, the Agriculture sector
has a smaller impact than others. In the past ten years ago, a great number of laborers working in
the Agriculture sector tended to shift into the Service sector and Industry and Construction sector,
due to climate change. By doing these things, the national unemployment rate might decrease in
the Services sector and Industry and Construction sector and recover the economic growth.
However, the government has to maintain the agricultural workforce to be stable.
Conclusion
The government has implemented many policies and incentives to address the negative
impacts of the Covid - 19 pandemic. However, it is just a short-term solution. Businesses and
individuals cannot make full use of these policies and incentives. Thus, the government should
consider the long- term plans to recover economic growth. The Service and Industry sectors are
the two important aspects; the authority needs to concentrate on solving, first. The main reason is
that these sectors contributed more than 90 % to the whole GDP and most of the workers
working in service and industry. Although Covid 19 influences negatively on the Vietnamese
economy, there are many new industries opened like e-commerce. As a result, the unemployment
rate cannot reduce thanks to these new industries.

Page 21
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ECO 205:

The job market in Vietnam - a

ECO 205_Group: “COOLEST”

ECO 205_Group: “COOLEST”

ECO 205_Group: “COOLEST”

The overview of the Vietnam economy in 2020

ECO 205_Group: “COOLEST”

The job market has changed in Vietnam by the COVID-19 pandemic.

ECO 205_Group: “COOLEST”

The job market in the Agriculture sector

Vietnam’s Agriculture sector

ECO 205_Group: “COOLEST”

ECO 205_Group: “COOLEST”

The Industry sector

ECO 205_Group: “COOLEST”

Table 1. The number of businesses temporarily shut

ECO 205_Group: “COOLEST”

The enterprise registered to suspend business for a definite period.

ECO 205_Group: “COOLEST”

The enterprise suspends its operation waiting for dissolution procedures.

Enterprise completed dissolution procedures.

ECO 205_Group: “COOLEST”

ECO 205_Group: “COOLEST”

For example, Dong-A company (Tan Thuan), specializing in the production of

ECO 205_Group: “COOLEST”

The Service sector

ECO 205_Group: “COOLEST”

ECO 205_Group: “COOLEST”

ECO 205_Group: “COOLEST”

Resolutions for unemployment from the government.

should focus on recovering the national economy, first.

Figure 1. The diagram of the Government's solutions to support the unemployed.

ECO 205_Group: “COOLEST”

ECO 205_Group: “COOLEST”

ECO 205_Group: “COOLEST”

The opportunities of the Vietnamese labor force after the Covid-19

ECO 205_Group: “COOLEST”

ECO 205_Group: “COOLEST”

B&Company. (2020). An Overview Of COVID-19 Outbreak Affecting On Vietnamese Social-

COVID-19 Impact Assessment: Analysis of the Potential Impacts of COVID-19 on Vietnamese

ECO 205_Group: “COOLEST”

General Statistics Office of Vietnam. (2020). Retrieved from https://www.gso.gov.vn/en/data-

ECO 205_Group: “COOLEST”

ECO 205_Group: “COOLEST”

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