ILO presentation: Labour market and employment trends for youth in the recovery period, and recommendations for Viet Nam

• Excellencies,
• Distinguished leaders, panellists and participants,
• Ladies and gentlemen,

It is a privilege for the International Labour Organization to join you today. The ILO has a long-standing commitment with the Government of Viet Nam and social partners to promote productive employment and decent work for all. The role of youth and their contribution to economy and labour market is central towards an inclusive and sustainable recovery, in particular in an ageing society.

Young women and men in Viet Nam and across the Asia and the Pacific region have been severely and disproportionately affected by the COVID-19 crisis across three dimensions: (i) disruptions to their education, training and work-based learning; (ii) increased difficulties for young jobseekers and new labour market entrants; and (iii) job and income losses, along with deteriorating quality of employment.[1] Given the severity of the shocks, there is also increasing evidence on the crisis’ impact on young people’s mental health and labour market aspirations.

The latest ILO estimates on the global COVID-19 recovery show that the recovery remains fragile. The positive trends in hours worked globally have stalled in early 2022 and remain below pre-crisis levels of 2019, with risks posed by supply chain disruptions, financial distress and geopolitical tensions.[2] While Viet Nam and other countries in the region have an impressive record of structural transformation shaping the sectoral employment outlook for youth, further targeted investments in youth are needed to sustain these efforts. The youth employment deficit in South-East Asia and the Pacific in 2021 relative to 2019 was estimated at 5 per cent, and is projected to show limited recovery in 2022. Overall, there is a divergence in youth employment recovery between low, middle, and high-income countries, and further inequalities within countries.[3]

The crisis also exacerbated the pre-existing labour market vulnerabilities of youth in Viet Nam. Youth were and continue to be more likely to be unemployed than adults. While Viet Nam has a high female labour force participation rate, gender gaps persist in employment quality, in earnings and in decision-making jobs. Youth who are not in employment, education or training were more likely to find an informal job than a formal job before the crisis in 2019.[4] The COVID-19 crisis also had an uneven impact on wages of young people, of informal workers and of workers with lower education in Viet Nam.[5] Labour market indicators such as relatively moderate unemployment rates also need to be interpreted with caution. Data from a longitudinal Young Lives study in Viet Nam in 2020 showed that young people’s work resilience to the COVID-19 impacts to remain employed seems to have been more driven by the need to work than by capacity. Young workers in the survey seem to have been able to keep a job but at the cost of accepting a worse-paid job or lower earnings.[6]

In Viet Nam, labour market data for the second quarter of 2022 from the General Statistics Office show a recovery momentum with declines in the quarterly youth unemployment rate and in the number of youth not in education, employment or training (NEET). Yet, there are still 1.5 million young people aged 15-24 not in education, employment or training according to GSO.[7] This means they are neither gaining experience in the labour market, nor receiving an income from work, nor enhancing their education and skills.

Viet Nam and economies across the region are at a critical juncture. The recovery policies need to address these underlying pre-crisis vulnerabilities to prevent deeper economic and social scars and promote a better future of work for young people. Allow me to highlight five points:

1. First, a better functioning labour market that creates quality jobs allowing for a virtuous circle between productivity and decent work. This requires continued tailored macroeconomic support to assist enterprises, boost labour demand and support young workers in their labour market transitions. To have the desired impact, prioritizing youth employment to sustain the focus of Viet Nam’s Socio-economic Development Strategy may be considered. The experience of countries that have successfully supported youth throughout the crisis has taught us that the pre-crisis strength of their national youth employment support systems and of labour market institutions played a key role in the crisis response. Now is the time to further strengthen these support systems and institutions to build resilience for future shocks in Viet Nam. This needs to be built on the respect of fundamental principles and rights at work and other labour standards. An agile labour market information system, as well as effective career development support and employment services are also needed to complement this integrated approach.
    
2. Second, building on the progress made through structural transformation, investments in longer-term transformative changes to the economy and creation of decent jobs are needed, taking into account climate change and technological changes. Rising levels of educational attainment among youth are not sufficient to ensure rising incomes and improved job quality. The macro-econometric modelling of the latest ILO Global Employment Trends for Youth 2022 suggests that a big sectoral investment push in green, digital and care economies could create an additional 16 million jobs for young people aged 15–29 years in Asia and the Pacific by 2030 relative to a business-as-usual scenario, while also setting economies on the path towards greater sustainability, inclusiveness and resilience. This underlines the employment potential of investments in the digital and green transformation.
    
3. Third, adopting supportive labour market polices and promoting skills development. Skills are a driver for economic transformation and productivity, and having effective skills anticipation is needed to direct reskilling and upskilling efforts. Further investments in young people’s capabilities can open up pathways to increased labour productivity and decent work, including for youth in low-paid jobs or with lower levels of education in Viet Nam. Further measures to promote the creation of jobs for young people and accelerate the transition to formal employment include well-designed incentives for businesses and effective employment services.
    
4. Fourth, policies need to address youth-specific vulnerabilities. This may be considered in gender-responsive policies in the context of the Employment Law to tackle the diverse challenges encountered by different groups of young people, from disadvantaged youth to highly educated youth.
    
5. Finally, an inclusive recovery and better future of work also benefits from the active and meaningful engagement of young people in shaping these policies. In this regard, social dialogue with the employers’ and workers’ organizations continues to be essential.

The ILO stands ready to support the Government, employers and workers on this path to ensure a human-centred recovery and a better future of work for youth.

Thank you.

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[1] ILO and ADB, Tackling the COVID-19 youth employment crisis in Asia and the Pacific; ILO (2021) An update on the youth labour market impact of the COVID-19 crisis, Statistical brief, 2020.
[2] ILO, ILO Monitor: COVID-19 and the world of work, Ninth edition, 2022; ILO, World Employment and Social Outlook – Trends 2022, 2022.
[3] ILO, Global Employment Trends for Youth 2022: Investing in transforming futures for young people, 2022.
[4] ILO, Informal employment in Viet Nam: Trends and determinants, 2021.
[5] ILO, COVID-19 and rising wage inequality: Trends and challenges in Thailand and Viet Nam, 2021.
[6] ILO, Youth labour market resilience during the COVID-19 crisis in three middle-income countries, 2022.
[7] General Statistics Office, Report on the post-pandemic recovery of employment and labour market in second quarter of 2022, Viet Nam, 2022.