Unemployment — VietEcon

TGIF! Can’t wait for the week to be over. I am ready for all the weeks to be over in the COVID-19 times. Luckily, Vietnam is doing better than the rest and is moving to normalcy. I can’t wait.

We are starting to get a sense of the impact of the pandemic. Today it was workers - 5 million affected! This is bad. Very bad. It equates to 9% of the total labor force. The US has seen 26 million, which is worse, but mainly because it had a much lower labor force participation rate (63% vs around 77% for Vietnam). But in the US, almost 50,000 people have died, while Vietnam has seen none die.

At the end of the quarter, Vietnam’s labor force participation rate fell 1.2-1.3%, and, as I stated above, 5 million workers have been affected. Of these, 59% have been temporarily laid off, 28% furloughed (or rotated, not sure exactly best translation for this) and 13% laid off.

And the unemployment rate rose to 2.22%, which is still amazingly low.

The International Labor Organization had a report out earlier with its view on how the labor market would be impacted. The report’s takeaway was:

Applying two scenarios, the ILO estimates that by the end of the second quarter the crisis can affect the livelihood of 4.6 to 10.3 million workers, whether through a decline in working hours, in wages or, ultimately, job loss.

We are well beyond the lower bound, and we could be moving up to the higher level. Looking at it on a sector level, there are almost 3m that are employed in accommodation & food services, which are surely going to be impacted, then another 23m that are at medium or medium-high risk of an impact. Even agriculture is being impacted, because supply chains are not as resilient as we expected, plus the government has limited exports of things like rice.

The only hope is that 1) as we go back to normal quickly, and that all these businesses can reopen and rehire their workers (or bring them back if they have only be furloughed), and 2) the government stimulus will make most of these workers whole or something close to it.

I am worried about both of those things, but here’s to wishes and prayers. And Friday!