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Ho Chi Minh City
Thursday, October 21, 2021

Labor force participation rate in Q3 lowest in 10 years

By Lan Nhi

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HANOI – The fourth wave of Covid-19 seriously affected the labor market in the third quarter of 2021, causing the labor force participation rate to fall to the lowest level in 10 years, according to the General Statistics Office of Vietnam.

By the end of the third quarter of 2021, the Covid pandemic situation had spread across the country, leading to protracted social distancing and lockdowns. Producers and non-essential services were heavily affected. Many workers were forced out of the labor market and the number of people entering the workforce in the third quarter of 2021 declined sharply.

The General Statistics Office’s report on the Covid impacts on the labor and employment situation said the labor force aged 15 and older in the third quarter of 2021 was 49.1 million people, down 2 million people compared to the previous quarter, and down 2.2 million people compared to the same period last year.

Compared to the previous quarter, the labor force in rural areas dipped by 1.4 million people, while the labor force in urban areas decreased by 583,000 people.

The labor force participation rate in the third quarter fell to its lowest level in 10 years at 65.6%, down 2.9 percentage points quarter-on-quarter and down 3.9 percentage points year-on-year.

During the pandemic, the Southeast region witnessed the sharpest decline in the labor force participation rate, with 62.8% (a decrease of 7.9 percentage points relative to the previous quarter and the same period last year), followed by the Mekong Delta with 65.4% (a decrease by 3.3 percentage points and 5.4 percentage points, quarter-on-quarter and year-on-year, respectively) and the North and South Central Coast with 66.8% (a decrease by 2.2 percentage points relative to the previous quarter and 4 percentage points relative to the same period last year).

In the third quarter, more than 28.2 million people aged 15 and over were negatively affected by the Covid-19 pandemic via job losses, furloughs, alternate working shifts, reduced working hours, reduced income, etc. Compared to the previous quarter, the number of workers adversely affected by the Covid-19 pandemic in the third quarter increased by 15.4 million people. Most of the affected people are of working age, from 25 to 54 years old, accounting for 73.3% of the total affected workers.

Of a total of more than 28.2 million people negatively impacted by the Covid-19 pandemic, 4.7 million people lost their jobs, accounting for 16.5%; 14.7 million people had to suspend production and business operations, accounting for 51.1%; 12 million people had their working hours cut, got furloughed or were forced to work in rotational shifts, accounting for 42.7%; and 18.9 million workers had their income lowered, accounting for 67.2%.

The Southeastern part and Mekong Delta are the two regions that have been hit the hardest. The number of workers in these two regions who reported that their jobs had been negatively impacted by the pandemic accounted for the highest proportion, at 59.1% and 44.7%, respectively. These figures are much lower in the Northern Midlands and Mountains and the Central Highlands, at 17.4% and 19.7%, respectively.

Workers in urban areas suffer more than in rural areas. Some 46.2% of workers in urban areas are adversely affected by the Covid-19 pandemic, while the figure in rural areas is 32.4%.

Nearly half of the employed people (48.7%) said their job was difficult due to the pandemic (double that of the previous quarter, up 26.1 percentage points). More than two-thirds of the total unemployed (80.9%) said their work was affected by the pandemic (up 32.8 percentage points from the previous quarter).

Finally, of the 23.7 million people aged 15 and older who were outside the labor force, 14.5% reported being negatively impacted by the pandemic (up 10.7 percentage points from the previous quarter).

The average monthly earnings of workers in the third quarter of 2021 were VND5.2 million, down VND877,000 relative to the previous quarter.

The average monthly earnings of male workers were 1.4 times higher than that of female workers (VND6 million compared to VND4.3 million).

The average earnings of workers in urban areas were 1.35 times higher than in rural areas (VND6.2 million compared to VND4.6 million).

Compared to the second quarter of last year, which had witnessed “bottom” average earnings due to the implementation of social distancing in accordance with Directive 16, the average monthly earnings of workers in the third quarter of this year were much lower (lower than VND329,000). This has been the lowest level of earnings recorded in many years.

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