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Growing Pool of Unskilled Labor Left behind in Vietnam

A mismatch of economic development, education, and other factors has led to a skilled labor shortage in Vietnam, threatening to spread poverty in urban and rural areas.

Strategic Foresight Group writes,

“The percentage of unskilled labourers is expected to increase significantly in Vietnam in the next five years. Vietnam’s workforce was 48.54 million in 2009. 47.7% of that workforce was employed in the agriculture and fisheries sector, 21.5% in industry and construction and 30.8% in the services sector…With an increase in the workforce and the latter two sections demanding more skilled labourers, unskilled labourers are facing an uncertain future. The percentage of unskilled labourers in Vietnam was over 70% of the total workforce in 2009, up from 66% in 2006.”

The main reasons for this increase are a lack of relevant education and lack of vocational training. Education curricula have not caught up changing economic makeup, and many graduates simply aren’t prepared for current jobs. Only 10% of the total workforce has some sort of vocational training, which would allow unskilled laborers to enter the skilled labor workforce. IFTF adds that many employers are reluctant to initiate such programs because workers go through them, then leave for other jobs.

Implications

The Strategic Foresight Group writes that the industry and services sectors employ over half the workforce and account for 80% of GDP, but given the low supply of skilled labor, they will struggle to grow. Meanwhile, unskilled laborers will struggle to find employment. Migrants traveling to cities in search of jobs will likely remain unemployed, meaning more poverty in cities and more poverty in rural areas because workers can’t send money back to their villages.

IFTF adds that this is an importance case study for other countries modernizing their economies without finding ways to bring the workforce along.

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Sources:

Strategic Foresight Group, Dec 2010, page 12:
http://newsletters.clearsignals.org/SFG_Dec2010.pdf#page=12

‘Labour forces offer bizarre paradoxes.’ VietnamNet Bridge 12 February 2010: http://english.vietnamnet.vn/biz/201002/Labour-market-offers-bizarre-paradoxes-894471/

‘Vocational training for rural workers.’ DTI news. 16 August 2010: http://www.dtinews.vn/news/education/vocational-training-for-rural-workers_4192.html

‘Garment firms face labour shortage.’ Than Nien News. 20 August 2010: http://www.thanhniennews.com/2010/Pages/20100822123002.aspx

‘An advantage backfires.’ Saigon Times. 30 June 2010: http://english.thesaigontimes.vn/Home/business/vietnam-economy/11123/