Many workers have no emergency savings: survey

By Hong Chieu    December 8, 2022 | 08:35 pm PT
Many workers have no emergency savings: survey
People wait to withdraw their social insurance premiums in HCMC as their wages have fallen short of their demands, December 8, 2022. Photo by VnExpress/Van Tung
A recent survey by the Institute of Workers and Trade Union found some 59% of workers have not saved up a single dong to even cope with financial emergencies.

The survey of over 6,200 factory workers revealed that if they lost their jobs 11.7% could hold out for less than a month, 16.7% for one to three months and 12.7% for more than three months, Vu Minh Tien, head of the union, said at a seminar Thursday that discussed the current labor market amid a shortage of orders for businesses.

Some 38% said they are in debt, with 14% finding it difficult to repay in time.

Workers' typical working hours have been cut from eight hours a day to 7.25 hours and there is no overtime.

Their income fell to VND6.7 million (US$281.45) from VND5.9 million in the third quarter, but their monthly expenses are around VND10.3 million.

Since their income falls so short of requirement, 18% of workers intend to withdraw from social insurance if they lose their jobs.

Tien said: "Many workers have checked out of their rented rooms and returned to their hometowns. Lunar New Year is around the corner, but their break is longer than usual."

He said over 42,000 people have lost their jobs and with each of their families having two to three members, more than 100,000 people have been affected as a result.

They include tens of thousands of pregnant women and mothers with little children.

The southern industrial hubs of HCMC, Binh Duong and Dong Nai are the worst affected.

According to Dang Tien Dat, head of the Binh Duong Province Labor Confederation's legal policy department, 240,000 workers have seen their working hours cut and 30,000 others have lost their jobs. More than 140,000 have applied for unemployment benefits this year.

He expressed concern about how furloughed workers would manage with the VND500,000 the trade union pays them as a monthly stipend.

It refers them to factories that still have orders, but they refuse to accept them unless they end their contracts with their employers, he said.

But then the workers, many of whom are senior and skilled ones and used to earn VND7- 8 million a month, would lose their seniority and have to start from the bottom, getting only VND3-4 million a month, he said.

Dat said it is necessary to reconsider the laws to enable these people to find seasonal jobs.

Businesses are expected to face difficulties until mid-2023, he added.

Nguyen Thanh Do, head of the HCMC Confederation of Labor's legal policy department, said 108,000 workers in the city have lost their jobs or are working fewer hours, 40,000 of them aged above 35 and 8,000 being pregnant or with young children.

The city trade union is concerned that businesses are laying off workers over the age of 35 in large numbers. At this age it is extremely tough for them to reenter the market. Furthermore, 59% of businesses owe social insurance premiums they should have paid for their employees.

The wave of unemployment is also extending northward, with over 2,000 workers in Hanoi suffering a cut in working hours, primarily in the electronics industry.

Nguyen Dinh Thang, vice chairman of the Hanoi Industrial and Export Processing Zone Trade Union, said many factories have stopped overtime work unlike a year ago when workers had to work extra to keep up with orders.

Following the easing of Covid curbs at the end of 2021, the Hanoi Confederation of Labor found that many workers had moved back to their hometowns.

According to Thang, it is easier for small and medium-sized industrial parks in other localities to hire workers. The income may not be as high as in a big city, but workers prefer to live in the countryside because they do not have to rent a house and their children's education costs much less.

It is expected that around 287,000 people will lose their jobs after the Lunar New Year.

Provincial trade unions have petitioned the Vietnam General Confederation of Labor to persuade the Government to provide immediate and long-term assistance.

"Statistics show that while the CPI has risen by only 4%, consumer prices have soared dramatically," Thang said.

He hoped that Hanoi would set up outlets to sell goods at stabilized prices for workers during the year-end.

A spokesman for the HCMC trade union wished that the government would provide low-interest business loans to enterprises that are short on orders.

The trade union is actively working to secure seasonal jobs for workers to help them hold out until the Lunar New Year.

Kieu Minh Sinh, head of the Dong Nai Labor Confederation's legal policy department, said it is critical to assist workers who lose their jobs but are ineligible for unemployment benefits.

Dong Nai expects 30,000 people to be in this situation by the end of the second quarter of 2023.

The administration is also considering extending the renting support package so that workers would have money while looking for new jobs.

According to the Vietnam General Confederation of Labor, as of December 7 more than 42,000 workers had lost their jobs, and 500,000 were underemployed at 1,500 companies around the country.

Businesses are expected to let go another 15,000 workers between now and the end of the second quarter of 2023, and cut the working hours for another 271,700.

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