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Exchange rate depreciation hurts Vietnamese workers abroad

By Le Tuyet   November 3, 2022 | 08:51 pm PT
The sharp depreciation in the Japanese yen and Taiwanese dollar means Vietnamese workers in the two places are getting paid millions of dong (VND1 million= $40.20) a month less than they had expected.

Hoang Quoc Thang has been unable to remit any money home due to the depreciation of the yen this year.

The 38-year-old technical intern in Japan borrowed VND200 million (US$8,000) from a bank two years ago with the hope of finding a job abroad and paid VND170 million to a brokerage firm in Hanoi.

He moved to Japan and found a welding job at a monthly salary of 11–12 man (1 man = 10,000 yen), equivalent to $844-884. He paid off the bank loan after less than a year in Japan.

He planned to save some money over the next three years of the contract, but had not expected the relentless fall in the yen's value.

The yen is now worth only VND167.99 as against VND199.25 in November last year.

Compared to what he first got, he now gets VND5 million less for every 10 man he remits home.

Yet, over the two years he has worked, his income has increased by 5-6 man or around 50 percent.

He says: "The strain of waiting for the yen's appreciation is felt by everyone in my family. If this problem persists, I might end up losing almost VND200 million when my contract expires and I have to return home."

Hoang Quoc Thanh at a construction site in Japan. Photo courtesy of Thanh

Hoang Quoc Thanh at a construction site in Japan. Photo courtesy of Thanh

Vu Thi Truot of Bac Giang Province, who has been working in Taiwan five months, has seen the Taiwan dollar depreciate by a third in the last three months.

Two years ago she borrowed VND160 million to pay the labor agent, which included $2,200 asbrokerage and $400 as an "anti-escape" deposit.

The 47-year-old earns a monthly salary of TWD$17,000 (over $528) as a domestic help. This used to be worth VND14 million but is now less than VND13 million.

Her bank follows up each month to ensure Truot pays the loan dues, meaning she has to remit nearly all of her income home rather than put away the money and wait for the exchange rate to improve.

The duration of the contract is three years, but she realizes she will be unable to save much money during this time.

1 TWD is now equal to VND772.47, down from VND789.05 in mid-June.

There were 23,000 Vietnamese working in Taiwan and 40,500 in Japan as of July this year.

According to Phan Viet Anh is the administrator of a Facebook group for Vietnamese working in Japan with some 25,000 members and the author of the book "Toi Di Nhat" (I Went To Japan).

He says before the yen went into free fall, Vietnamese workers going to Japan as trainees could expect to return home with VND600 million after three years if they spend frugally. But now it is only around VND400 million.

Many will now need to extend the period of loan repayment.

Vietnamese working inside a factory in Japan. Photo by VnExpress/Thai De

Vietnamese working inside a factory in Japan. Photo by VnExpress/Thai De

Anh polled 80 Vietnamese trainees in Japan and found that 76% of them had to pay more over VND150 million to travel to Japan for training.

Eighty percent said they had to get bank loans and 65 percent said it took more than a year to pay off their loans.

Many Japanese and Taiwanese citizens speak about supplementing their incomes with part-time work on online labor community groups. But unfortunately the laws there forbid guest workers from doing this. Japan has harsh penalties for moonlighting foreign workers.

Le Thi My Hanh, director of Training and Labor Transfer Co., Ltd., agrees that labor firms shouldreduce their brokerage.

She advises guest workers to hold on to their salaries until the local currencies regain their value if they have depreciated.

If they have trouble making monthly repayments on bank loans, they could be eligible for a moratorium on the principal and only pay interest, she adds.

 
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