Why Is Vietnam Facing Labor Shortage?

Vietnam – The Covid situation is going to affect the supply chain throughout the world economy. Labour in Ho Chi Minh are not happy with the way they are being treated. Their shortage is going to severely affect the global supply chains, confirmed reports have stated.

There is apparently a shortage of 100,000 workers in Vietnam’s industrial south. This has been exasperated due to added restrictions on workers. As of now, many companies are suffering due to labor shortages. From Intel to Samsung Electronics, southern Vietnam is home to production hubs for many global corporations. As the region attracts more manufacturers seeking respite from the U.S.-China trade war, protracted staffing setbacks could send ripples throughout global supply chains.

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Post the covid mayhem, workers are not returning back to their previous employments. This could lead to a huge shortage of labor in various countries. In Ho Chi Minh for example, there is going to be a shortage of almost 84000 workers.

With Vietnam’s strict lockdowns, many migrants could not go back home. They were literally living in factories as they couldn’t be shutdown indefinitely despite lockdown restrictions. Many did return back without pay and now scared that coming back could get them caught again in repeatedly mutating virus strains.

Adding on the woes are labor disputes. Over 10,000 workers went on strike earlier this month at a factory for key Taiwanese contract shoemaker Pou Chen in Dong Nai Province. Main woes include low pay, no overtime and protection against contingencies like Covid-19.

Foreign investment in Southeast Asia has accelerated in recent years as global companies shift production out of China over its trade war with the U.S. Still, “we just can’t keep operating at the same level” from last summer, said one Japanese parts maker in southern Vietnam. Should the labor shortage become chronic, many companies in the region may consider moving production elsewhere.