Vietnam’s “Economic Times” reported on May 2: According to the latest 2013-2014 Global Competition Index ranking list released by the World Economic Forum (WEF), Vietnam’s labor market efficiency index fell by 5 places, ranking 56th. Due to factors such as labor market efficiency, financial market development, and technological level, Vietnam ranks lower than Malaysia (24), Brunei (26), Thailand (37), Indonesia (38), and the Philippines (59), but higher than Laos (59). 81), Cambodia (88), Myanmar (139).
On May 13, “Vietnam Customs News” reported that according to data recently released by the International Labor Organization (ILO), Vietnam’s labor efficiency ranks last in Asia, 1\15 of Singapore, 1\11 of Japan, and 1\1 of South Korea. \10, which is much lower than even middle-income countries in ASEAN countries. For example, it is only 1\5 in Malaysia and 2\5 in Thailand. It is worth noting that labor efficiency in Vietnam is on a downward trend. From 2002 to 2007, Vietnam’s labor efficiency growth rate was 5.2%. However, since the financial crisis in 2008, the average growth rate has declined and can only remain at 3.3%.
Production efficiency drops rapidly
As we all know, Vietnam has superior natural conditions and rich resources, which is a prerequisite for economic development. After more than 20 years of hard work and innovation, Vietnam has undergone many changes and achieved great development. However, these achievements do not match Vietnam’s existing natural endowments.
Hu Dexiong, a professor at the University of Economics in Ho Chi Minh City, Vietnam, said that it is completely wrong to regard the low quality and low price of labor as an advantage, because it is labor efficiency that determines corporate profits. Dr. Christian H.M., special adviser to the Harvard School of Strategy and Competition, said that Vietnam’s labor efficiency ranking in the global competition index has been declining year by year. From 2009 to 2010, Vietnam ranked 75th among 133 countries and regions. At that time, Singapore ranked 3rd, Malaysia 24th, and Thailand 36th. Vietnam has invested a lot of capital in industrial production, but due to low labor efficiency, the value created is not high. The consequence is that most foreign direct investment funds are concentrated in areas with low productivity. Recently, at a seminar on “Vietnam’s Middle-Income Trap” held by the Central Economic Commission of Vietnam, Professor Kennichiohno of Japan’s National Policy Research Institute directly pointed out that in Vietnam, wages are growing faster than labor efficiency, so The salary increase is unrealistic. For example, from 2009 to 2012, wages increased by 25.9%, but labor efficiency only increased by 3.2%. At the same time, Japan’s wages increased by 9.8%, but labor efficiency increased by 10.1%.
The gap between supply and demand in the labor market
While labor efficiency is low, there is a large gap between supply and demand in Vietnam’s domestic labor market. According to data released by Vietnam’s Ministry of Labour, Invalids and Social Affairs, there are currently many unreasonable phenomena in Vietnam’s labor market. The unemployment rate for young people aged 15 to 24 was as high as 5.95% in the fourth quarter of 2013. It is worth mentioning that many workers with professional skills have very high unemployment rates. For example, the unemployment rate for those with a technical secondary school degree is 7.68%, equivalent to 8,300 people, an increase of 1.3 times compared with the fourth quarter of 2012; the unemployment rate for those with a college degree is 9.74%, equivalent to 19,200 people, an increase of 1.3 times; The unemployment rate for those with a bachelor’s degree or above is 4.25%, equivalent to 7,200 people, an increase of 1.7 times. In particular, the unemployment rate for graduates aged 20 to 24 with a college degree or above has reached 20.75%. It is worth noting that the proportion of long-term unemployed, that is, the number of people who have been unemployed for more than one year, is as high as 44.2%, an increase of 2.4 times compared with 2012. The unemployment rate of the labor force with professional skills is much higher than that of the labor force without professional skills. The former is 54.5% and the latter is 39.6%.
Vietnam’s strategic goals for economic and social development by 2020 require that Vietnam become a moderately developed industrial country, with industry and services accounting for approximately 85% of GDP, and the agricultural labor force accounting for 30% of the entire society. This is a huge challenge for Vietnam’s education and vocational training system, which is responsible for providing human resources. Dr. Christian H.M said that if Vietnam cannot find ways to improve the quality of human resources, Vietnam will be limited to the current level of development.
