III.

INDUSTRIES:

Vietnam's economy is growing stronger and stronger and bringing better living conditions to

the people. Unemployment is a situation that many countries cannot wholly solve because it

has many causes surrounding it such as expertise, skills, education and requirements from

companies as well as competition in the labor market. It is typical to mention that currently,

all countries worldwide are facing the covid 19 pandemics. However, Vietnam is a country

with a spectacular ability to control the pandemic that is recognized by the world. However,

our country cannot avoid heavy economic losses leading to mass unemployment due to the

"Covid 19 Economic Trap". That means the situation Vietnamese economy has to suffer and

struggle with the next SAR-COV 2 outbreak will happen and even without their appearance,

we are still stuck in.

Source: Government of Vietnam

According to the administratives' estimation, nearly half of the labor force, equivalent to 30

million Vietnamese workers, were affected adversely by the lockdown during April. In

addition, the Ministry of Labor also reported that in the second quarter, the urban

unemployment rate increased by 33%, and the average income per worker decreased by 5%
(Morisset, 2021). This is the first time in the past ten years, Vietnam's economy witnessed a

severe decline in labor market participants and employed people. Enterprises are forced to

support many measures, including reducing labor such as cutting, rotating leave, or recruiting

seasonal workers and temporary workers to maintain operations. To be illustrated, 69.2% of

people had their income reduced, 39.9% had to reduce working hours, take time off work,

take alternate leave, and about 14% were forced to take a break or suspend production and

business activities (Quynh Chi, 2021). That reason leads the number of formal workers to

decrease and the number of informal workers to increase, leading to a rebound in the

proportion of workers in informal employment in 2020 after many years of continuous

decline.
One of the specific industries provides a large number of jobs in the textile industry.

However, the order to close the blockade to fight the epidemic affects importing raw

materials of textile and garment companies and a decrease in consumer demand. Therefore,

enterprises have to face a shortage of raw materials, slow and sparse orders resulting in a

lack of jobs and insufficient financial resources to pay employees. According to Mr. Dau Anh

Tuan - Head of the Legal Department of VCCI, the number of workers in the textile and

garment industry heavily affected by the epidemic is 97%. (Quynh, 2021). The chart below

shows Wazir Advisors' consumption projections before the next outbreak in late 2020 for

apparel consumption to decline by -40% and -45% in the US and Europe, respectively. In

more detail, in 2019 US stood at 273 billion US dollars, then fell to 165 billion US dollars

and Europe in 2019 was 440 billion US dollars, then decreased to 240 billion US dollars

(Hien, Jonathan, Ong, nd).

Relating to the consequences of the third Coronavirus wave on quarter I in 2021, General

Statistics Office (GSO) reported that approximately 9,1 billion people suffer the negative

effect of a pandemic affecting their work. Specifically, 540,000 people lost their jobs, and 2.8
million people temporarily suspended their production and business. 3.1 million people

reported having their working hours cut or forced to take time off, and 6.5 million workers

reported reducing income. In addition to the below chart, GSO also reported that the number

of employees 15 years old and over in the first quarter of 2021 is 51 million people. That

number is 1.1 million people compared with the last quarter and a decrease of 180.9 thousand

people compared to the previous year. (GSO, 2021)

Quarterly labor force, period 2019-2021 (Unit: Million people, Source: GSO).

Another critical industry that is also greatly affected by the Covid-19 epidemic is the

consumer electronics industry. The fourth outbreak of Covid in May 2021 substantially

impacted exports and imports, leading to production activities in industrial parks in some

provinces. It is estimated that export turnover reached USD 26 billion, goods decreased by

2.1% compared to the previous month. Essential commodities for export with more than 1

billion USD all dropped, such as phones and components down 3%, electronics and

computers down 5%, equipment, tools, and spare parts down 18% (GSO, 2021). Besides that,

the market research firm CCS Insight predicted that in 2020, phone consumption would
decrease by 13%, of which 10.6% for smartphones, is the lowest sales year since 2010. These

numbers show that the epidemic affects the income of users, so they limit consumption to

save money. As a result, consumer electronics factories of foreign brands in Vietnam also

have reduced orders, leading to underemployment.

Based on the significant reduction in business due to the epidemic, companies are forced to

tighten labor, reduce costs incurred, leading to stricter screening of workers based on skills

and experience, which leads to heavy unemployment for the people.

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growth-avoid-covid-19-economic-trap

Quynh, L. (2021, March 25). Báo cáo tác động của dịch Covid-19 đối với doanh nghiệp Việt

Nam. Cổng thông tin quốc gia về đăng ký doanh nghiệp. Retrieved from

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covid-19-doi-voi-doanh-nghiep-viet-nam.aspx

Quynh Chi. (2021, June 7). Năm 2021, thị trường tài chính tiêu dùng hồi phục nhưng khó bứt

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COVID-19 đối với kinh tế Việt Nam. PWC. Retrieved from

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tap-xuat-khau-hang-hoa-giam-viet-nam-nhap-sieu-tro-lai/
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