Growing numbers quit regular jobs, move to informal sector

By Van An   May 9, 2022 | 05:05 pm PT
Growing numbers quit regular jobs, move to informal sector
Shippers wait at a Covid-19 checkpoint in HCMC's Go Vap District, June 3, 2021. Photo by VnExpress/Quynh Tran
Le Phan Quang Hai of Hanoi says he has "no regrets" about quitting his job as a factory worker earlier this year to become a deliveryman.

He in fact regards it as a wise career choice because he earns VND8-9 million ($348-392) a month and can work whenever he wants.

"I would never go back to my old job where the pay was low and I had to deal with constant pressure," the 43-year-old says.

Before the pandemic began he earned VND8-10 million a month, but the electrical factory where he worked had difficulty obtaining materials and components due to China's strict Covid restrictions and his output decreased a result, dragging down his income with it.

"With a monthly income of VND5 million, how could I survive in the capital where the cost of living is high?

"It was pointless for me to stay."

Hai is among a growing number of people who have quit formal full-time jobs since the Covid-19 pandemic began due to low wages or lack of opportunities for advancement and now completely rely on informal jobs for a living.

The average number of formal workers increased by 5.6 percent per year from 2016 to 2019 while informal workers increased by only 3.6 percent, according to data from the General Statistics Office (GSO).

During the economic fallout from the Covid outbreak since 2020, many workers lost their jobs or experienced pay cuts. Many were forced to return to their hometown or take on informal jobs to survive in big cities, and as a result, the number of informal workers reached 20.3 million by the end of 2020, an increase of 119,100 from the previous year.

The trend shows no sign of slowing down with the number rising to 21.4 million at the end of the first quarter this year, according to the GSO's latest report.

Despite the lack of social insurance and other protections, millions of people have become self-employed or taken on informal jobs because they can still earn a decent income and face less stress than in contracted jobs.

Hai says his salary did not increase after years of working but had to pay social insurance premiums to qualify for a pension on retirement and so decided to quit.

"I am my own boss and no one can tell me what to do. Not to mention that my new job allows me to spend more time with my family."

People with social insurance are only eligible for receiving a pension after 20 years of paying premiums.

People wait outside of a social security agency in Thu Duc, HCMC, to withdraw their insurance contributions, April 2022. Photo by VnExpress/Dinh Van

People wait outside of a social security agency in Thu Duc, HCMC, to withdraw their insurance contributions, April 2022. Photo by VnExpress/Dinh Van

Nearly 209,000 people chose to exit the social insurance scheme in the first three months of this year and make a one-time withdrawal of their accumulated amount, up 1 percent from a year ago.

They will get meager or no pensions after retiring and cannot enjoy free healthcare.

Most people (97 percent) opting for the one-time withdrawal were unemployed for a year, are mainly young people aged 26-29, and were not working for state agencies. More women (55.6 percent) than men (44.4 percent) chose to withdraw.

According to a report titled 'Vietnam as an Ageing Society,' published in 2021 by the Hanoi University of Social Sciences and Humanities and Germany's Justus Liebig University Giessen, 64 percent of the 13.4 million people of retirement age do not currently have a pension.

Some 46 percent of people aged 60-64, 30 percent aged 70-79 and 10 percent over 80 still have to work for a living, it said.

Technology advancement has also enabled people in big cities to work in the informal sector, making deliveries or selling goods online, and do multiple jobs to earn a higher income.

Tran Minh Tuan too quit his job as an electrician in HCMC to become a delivery driver.

He used to be paid VND7 million a month and only got a small bonus and never a raise in minimum salary despite getting numerous letters of recognition during his eight years at the company. He resigned late last year because he did not see any opportunity for advancement or growth.

He does not plan on coming back since he is making more money now by being a food delivery worker and assisting his wife, who owns a small clothing store, by delivering goods in his spare time.

"I don't mind not having social insurance," he says. "I'm making more money than before and enjoying having more control over my time."

Some factory workers who left big cities do not intend to return because they have discovered that the countryside is a more pleasant place to live in.

Nguyen Cao Binh Minh, 53, is enjoying a stress-free pastoral life after returning to the northern Yen Bai Province with his wife and daughter last October.

"I'm tired of the rat race in the city," he says.

He no longer worries about rent and other expenses and spends his time growing vegetables and raising livestock on his family's plot of land.

According to a GSO report in January, around 2.2 million workers left major cities and returned to their hometowns during the pandemic.

Back in Hanoi, Hai is relieved that his workday now begins at 10 a.m. instead of 8 a.m. and that he can now pick up his daughter from school in the evening.

"I deliberated long and hard before quitting my job at the factory.

"I enjoy working as a deliveryman because many of my customers remember my name and I am happy with the money I am making," he adds with a big smile.

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