Economy - September 15, 2022 | 05:13 pm PT

Low skill, minimum pay: Vietnamese workers languish abroad

When Luong Xuan Hoi first went to Japan to work in 2018 he ate mostly salmon head and rice for a year, two of the cheapest food items there.

He had to save money to repay his house construction debt of VND200 million (US$8,500) back in Vietnam.

A Vietnamese employee works in a factory in Japan. Photo by VnExpress/Thai De

The 34-year-old left the central province of Thanh Hoa four years ago to find a job, and in the first two years he earned VND18 million a month, much higher than his peers in Vietnam. He only spent a fifth of the money and sent the rest to his wife and children back home to pay the debts, which had by now doubled since he owed brokers who sent him to Japan.

"Japanese use salmon meat for sashimi and discard the head, which I used to cook with cabbage," Hoi says.

He has yet to spend any money on traveling or entertainment.

"The income in Japan is higher than in Vietnam, but so is the cost of living," he says.

"Vietnamese workers have to be thrifty and live in poor conditions to send money back home."

Hoi is among millions of Vietnamese who have gone abroad to work in the last four decades, mostly in the lower segments of the value chain and earning minimum incomes by doing simple tasks.

Vu Thi Truot, 47, signed up for exactly the minimum wage in Taiwan of TWD17,000 ($546) in May for working as a housekeeper for a family.

The government in August increased the minimum to TWD20,000 but she had already signed the contract and will get no pay increase for the next three years.

"Many families are paying housekeepers TWD33,000 a month, almost twice my salary. Of the four Vietnamese who came with me, three have quit their jobs and work illegally for others for higher wages."

The head of a brokerage that links Vietnamese workers with employers in Taiwan says many get paid the minimum salary in Taiwan for doing basic jobs that locals do not want to do, like taking care of a family or a senior.

Phan Viet Anh, who returned to Vietnam in 2020 after working in Japan for three years, says many Vietnamese go to that country to ostensibly be trained in skills that could be beneficial when they return, but that is usually not the case.

Workers are usually tasked with operating construction machinery and checking inventories, which require low skills and therefore fetch only minimum salaries, he said.

Le Duy Binh, managing director of consultancy Economica Vietnam, says in the next 10-15 years, Vietnam will gradually lose its young and cheap labor advantage and the aging population would likely cause a labor shortage.

This means that from now Vietnam should send workers with higher skills abroad for valuable training in various technologies, he adds.

40 years, 40 markets

Vietnam started to send workers abroad in the 1980s when the country was transitioning from a command economy to a market economy, as the government believed that "through partnerships [with other countries] we can provide jobs and training to a number of young people who have not been absorbed by the domestic economy," according to a resolution issued in November 1980.

The four main job markets at the time were the Soviet Union, East Germany, Bulgaria, and Czechoslovakia. Most workers who are chosen to be sent were former military personnel, government workers, factory workers, and high school graduates.

A Vietnamese worker sits next to a foreign manager at a garment factory in East Germany in the 1980s. Archive photo

Between 1980 and 1990 some 300,000 workers were sent abroad, but the dissolution of the Soviet Union in the early 1990s resulted in declining demand for Vietnamese workers in the four markets, forcing the government to look for new markets in 1990-2000.

Some Asian markets like Japan, South Korea and Taiwan had aging populations and local workers were moving up the value chain, creating a need for mechanics, domestic helpers and caretakers for older people, which were filled by workers from Vietnam and other Southeast Asian countries.

In 1992 Vietnam first sent workers to Japan and South Korea as industrial interns and sailors on cargo ships.

Since then Northeast Asia has become a major market for Vietnamese workers, with the numbers surging from 1,000 in 1991 to 31,000 in 2000.

Since 2000 labor exports have played an increasingly major role in Vietnam’s economy with 80,000 workers going to 18 countries and territories in 2005.

Malaysia was a top destination, with Vietnamese workers going mostly to work in the electrical, electronics, garment, mechanical, and wood processing sectors.

Vietnamese workers craft jewelry in Malaysia in 2007. Photo by VnExpress/Hong Khanh

But the low incomes of $150-200 a month and poor working conditions meant Malaysia gradually became unattractive, and South Korea and Japan, where the pay was higher, beckoned.

By 2015 only 7,300 Vietnamese workers were in Malaysia, and this figure plummeted to 450 by 2019.

Between 2012 to 2019 the number of workers going abroad grew by 21% a year, and only dropped in 2020 and 2021 because of Covid-19.

The country sent 45,000 workers abroad last year, but as the global economy recovers from Covid, it wants to double that number this year.

In the last four decades Vietnam has increased the number of its labor markets from four to 40 and to 30 different sectors.

Over 500 labor companies were sending 100,000 workers abroad each year, 90% to Taiwan and Japan.

Nguyen Gia Liem, deputy head of the Department of Overseas Labor, says: "The number of workers accounts for 7-9% of Vietnam’s workforce. This helps ease the pressure on creating jobs domestically."

Workers sent home iron boxes and rice cookers in the 1980s, but now send $3-4 billion in cash each year, with many areas in Hai Duong, Thanh Hoa and Nghe An labeled "labor export" villages because young people there mostly work overseas.

Low skills, low income

Experts say most workers going to Japan and South Korea only do low-skilled jobs and have limited language skills though they earn $1,000-1,800 a month.

"For many years Vietnam’s policy only focused on finding jobs for poor workers and not on helping them access foreign technology and management skills," Nguyen Xuan Lanh, deputy director of Esuhai, which sends workers to Japan, says.

Increasing the rate of skilled workers abroad is necessary since what they learn there would be useful to Vietnam when they come back, and prioritizing certain sectors is also important, he says.

Many who return are able to buy homes or start a business, but most of them struggle with finding jobs as their skills do not improve during the time abroad, he adds.

Officials also have a headache with convincing workers to return after their contracts expire, with many choosing to stay illegally in foreign countries fearing they would not be able to earn the same high income in Vietnam.

This has been causing a backlash in major labor markets.

Taiwan, for example, stopped accepting Vietnamese domestic helpers in 2005 and only lifted the ban in 2015.

South Korea stopped allowing in new workers from Vietnam in most sectors between 2013 and 2016, and thousands of Vietnamese still live there illegally.

A complete strategy is needed to resolve labor export issues in the 2022-30 period, Dang Van Dung, deputy director of the Ha Tinh Province Department of Labor, Invalids and Social Affairs, says.

Without this, Vietnamese workers will be stuck at the low-skilled levels and this could affect the country’s development, he warns.

Le Tuyet, Hong Chieu

 
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