Vietnam's unemployment rate rises to 2.3 pct in Q2

By    August 19, 2016 | 06:00 am GMT+7
Vietnam's unemployment rate rises to 2.3 pct in Q2
A woman works at a tea factory producing black tea for export in Yen Bai province, Vietnam, August 4, 2016. Photo by Reuters/Kham

Advanced degrees don't guarantee Vietnam's young people long-term employment.

Vietnam's unemployment rate was estimated at 2.3 percent from April to June, the Ministry of Labor, Invalids and Social Affairs said on Wednesday.

Breaking down the data, the number of unemployed people increased by 16,400 to 1.08 million in the second quarter.

Statistics show that in Q2 there were 47.5 million people in the country's labor force.

It is generally believed that better education means a higher chance of employment. However, for graduates and people with master’s degrees, long-term employment is becoming increasingly out of reach.

Official figures showed that 39 percent of unemployed people are well-educated professionals, half of them with degrees or higher education.

The number of young people living in urban areas claiming unemployment benefits accounted for 11.3 percent of the total, while the rate in rural areas was 5.24 percent.

The percentage of long-term unemployed – those registered as out of work for more than a year – was 22.6 percent.

Even though the labor market remains stable, most jobs are low-paid and labor-intensive, and there aren’t enough jobs that require higher levels of education such as degrees, said Doan Mau Diep, deputy labor minister.

Unemployed people are mostly searching for high-paid, high-skilled jobs in areas such as financial services, business management and human resources. Meanwhile, the demand in the labor market mainly comes from the textile and garment, animal husbandry, manufacturing, mechanics, and sales and marketing sectors, which focus more on recruiting low-wage, labor-intensive workers.

According to the deputy minister, the government should monitor the supply and demand in the labor market so that educational institutions, including vocational schools and universities, can come up with suitable training programs to meet the market demand.

During the second quarter of 2016, average monthly earnings fell 5 percent to VND4.85 million ($217) from the previous quarter, data showed.

The decline is partially due to the fact that the productivity of Vietnamese labor remains low, according to Dao Quang Vinh, head of the Labor Institute.

He said training is necessary in order to maintain the quality of the labor force, but the number of trained workers only accounts for 20.62 percent of the labor force, slightly up by 0.56 percent from last year.

According to the World Bank, Vietnam's labor quality was rated at a mere 3.39 points on its 10-point scale, ranking 11th among 12 rated Asian countries, much lower than South Korea's 6.91 points, India's 5.76 points and Malaysia's 5.59 points.

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