Introduction
The International Labour Organization (ILO) notes significant labor market and social equity challenges in the Asia-Pacific region. Despite global economic recovery, job growth is moderate, and unemployment rates remain stable. This post examines the Vietnamese labor market in Q2 and the first half of 2024.
Positive Aspects
Increase in Labor Force
In Q2 2024, the labor force aged 15 and over reached 52.5 million people. This marks an increase of 148.6 thousand people from the previous quarter and 217.3 thousand people from last year. In the first half of 2024, the labor force grew by 196.6 thousand people compared to last year.
Higher Labor Force Participation Rate
The labor force participation rate in Q2 2024 was 68.6%, up 0.1 percentage points from the previous quarter. This shows more people are seeking employment.
Growth in Employment Numbers
The number of employed people in Q2 2024 was over 51.4 million. This is an increase of 126.6 thousand people (0.25%) from the previous quarter and 217.4 thousand people (0.42%) from last year. In the first half of 2024, employment increased by 195.7 thousand people (0.38%) compared to last year.
Rise in Education and Skills
In Q2 2024, 28.1% of Vietnamese workers had degrees or certificates. This is up 0.3 percentage points from the previous quarter and 1.3 percentage points from last year. This increase reflects Vietnam’s focus on improving education and skills.
Increase in Average Monthly Income
In Q2 2024, the average monthly income of workers was 7.5 million VND. This is up 490 thousand VND from last year. Most economic sectors saw significant income growth. For example, the water supply and waste management sector saw a 17.4% increase. The electricity, gas, hot water, and steam sector saw a 15.2% increase. In the first half of 2024, the average monthly income rose by 7.4% compared to last year.
Negative Aspects
Quality of Labor Supply
The quality of the labor supply remains a significant challenge. Over 70% of workers lack formal training. This gap highlights the need for improved training and certification opportunities.
High Informal Employment Rate
Informal labor continues to account for a large proportion of the workforce. In Q2 2024, 65.2% of employed people worked in informal jobs. This number increased by 271.7 thousand people from the previous quarter and 210.3 thousand people from last year. In the first half of 2024, the informal employment rate was 65%, up 0.2 percentage points from last year.
Rising Unemployment Rates
The difficult business environment led to an average of 18.4 thousand businesses withdrawing from the market each month in the first half of 2024. The number of unemployed people within the working age increased to about 1.08 million in Q2 2024. This is up by 24.2 thousand people from the previous quarter and 4.2 thousand people from last year. The unemployment rate within the working age was 2.29% in Q2 2024.
Increasing Underemployment
In Q2 2024, the number of underemployed people within the working age increased to about 948.0 thousand. This is up by 15 thousand people from the previous quarter and 7.3 thousand people from last year. The underemployment rate was 2.06%, with urban areas experiencing a lower rate (1.53%) compared to rural areas (2.41%). In the first half of 2024, the underemployment rate increased, with 940.5 thousand people underemployed.
Conclusion
The Vietnamese labor market in Q2 and the first half of 2024 presents a mixed picture. While there are positive developments such as increased labor force participation, higher employment rates, and rising average incomes, significant challenges remain. Issues like the quality of the labor supply, high informal employment rates, rising unemployment, and underemployment need to be addressed to ensure a sustainable and equitable labor market.
By understanding these dynamics, businesses, policymakers, and workers can better navigate the labor market and contribute to its improvement. Continuous efforts to enhance education, training, and employment conditions will be crucial for the future development of the Vietnamese labor market.
Table: Unemployment Rate within Working Age and Youth Unemployment Rate (ages 15-24) in Q2 from 2019-2024 (%)
| Q2 2019 | Q2 2020 | Q2 2021 | Q2 2022 | Q2 2023 | Q2 2024 | |
| Unemployment rate within working age | 2.18% | 2.85% | 2.62% | 2.32% | 2.30% | 2.29% |
| Youth unemployment rate (ages 15-24) | 6.50% | 7.60% | 7.47% | 7.63% | 7.41% | 8.01% |
