High
lending rates and surging prices for production input materials have led to a
rising unemployment rate in Ho Chi Minh City this month, according to the
City's Association of Enterprises.
Small and medium sized enterprises (SMEs) are
facing particular difficulties at this time. According to a survey conducted by
the Vietnam Association of Small and Medium Enterprises, 20 per cent of the
city's SMEs have closed their doors and 60 per cent have been forced to cut
their work forces while dealing with reduced revenues and operational
difficulties.
As a result, an estimated one third of the
city's enterprises have recently declared bankruptcy and thousands of workers
have lost their jobs.
Nguyen Cao Thang, deputy director of the Ho
Chi Minh City Employment Promotion Centre, said an increasing number of job
seekers come to his centre every day.
"In the first eight months of 2011, more
than 70,000 people registered as unemployed [at the centre] while only about
67,000 people registered for all of 2010," Thang said.
Tran Tuan Anh, deputy director of the city's
Centre for Human Resources and Labour Market Information, attributed the
growing unemployment rate to the imbalance between wages and the consumer price
index.
"Most workers say that they cannot live
on their wages," he said.
In response, the government recently decided
to increase the minimum wage in the city to $2 million ($100) per month
beginning October 1, he said.
However, the government's decision may pose
additional challenges for SMEs, particularly when it comes to social insurance
for their employees. The amount they contribute to the insurance scheme is
based on employee salaries. As such, there may be a pay rise but contributions
to the insurance scheme may be frozen.
The high inflation rate combined with the
price increase for input materials, high lending rates and legally mandated pay
rises have forced some SME's to reduce production as well as their work force.
Ho Van Loi, director of the Ho Loi Garment
Company said: "I have never faced so many difficulties and challenges as I
have recently. The price of input materials is increasing rapidly while
salaries are also rising. It is also very difficult for us to access credit. To
cope with these difficulties we have been forced to cut production and about
one-fourth of our labour force."
The Labour Information Market in HCM City has
forecast approximately 26,000 job vacancies in the city this month, an increase
of about 10 per cent compared with August, particularly in the services, sales,
marketing and construction sectors.
Anh mentioned problems with "virtual
recruitment" which saw some employers asking for more workers than they
actually required while also only offering a probationary salary of about 75-80
per cent of the negotiable salary or even lower.
However, Nguyen Tan Dinh, deputy director of
the city's industrial parks (IP) and export processing zones (EPZ) said many of
these advertisers didn't really need to recruit new workers but used the job
listings as PR for their enterprises.
He asked the workers to think twice before
making the decision to take on new employment.
"You should invest more in improving your
technical skills and stabilising yourself in one place in order to create
development opportunities instead of spending time, effort and even money to
look for new jobs," Dinh said.
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