Labour shortage hits Vietnam's factory powerhouses

VIETNAM: The “locomotives” of the country, Ho Chi Minh City and Binh Duong Province, experience a labour shortage among its apparel and shoe factories. Roughly 1.3 million workers departed the locations of two of Vietnam’s biggest industrial parks to return to their hometowns in the third quarter, according to local officials.

Pham Duc Hai, the administrator of Covid-19 prevention efforts in Ho Chi Minh City, said the total number of workers in export processing zones and industrial parks has dwindled by 46% or down to about 135,000.

As a counter-measure, managers tried to call the workers back and promised higher salaries.

The Ho Chi Minh City government also said it would provide free transportation and accommodations for the first month to those who will return to work.

As a result, 90% of the employees of Pouyuen Vietnam are back to work in Ho Chi Minh City, according to Cu Phat Nghiep, chairman of the trade union.

But many other factory workers decided to stay far away from their former companies’ work sites.

Studying Vietnam labour trends, Do Quynh Chi, director of the Research Center for Employment Relations, said 180 of 300 workers told her they wanted to return to their villages after realizing there is no safety net in the city.

“They want to recover emotionally. After 10 weeks of lockdown, they are totally exhausted,” Ms Do said.

Nguyen Huyen Trang, a worker for a major supplier for Nike, is fully vaccinated but fears working in the factory again. She and her husband returned to their home in central Vietnam even if her manager promised to increase her wages if she returned.

Doan Thi Bich Tram said she went days without food when the government imposed restrictions and received only USD130 as a subsidy for August and September. She said she has lost her trust in the government for causing many to starve and die from the infection.

Thu Trang’s factory that made branded sports shoes virtually shut down during the outbreak. She insisted on staying back home even if her manager promised higher wages because she considers HCMC unsafe. She sees farming in her hometown as more stable.

American retailers warned of a backlog in production that could affect business during the peak Christmas season.

Nike, whose 80% of its shoe factories were in the south of Vietnam, said that it had lost 10 weeks of production because nearly half of its apparel factories were shut down.

Some U.S. apparel brands, such as Chico’s, and Callaway, pulled out their production in Vietnam.

“American companies are seeing what they can do,” Adam Sitkoff, the executive director of the American Chamber of Commerce in Hanoi, said. He added that many companies were looking for solutions.

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