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Identifying Trends in
Vietnamese Labor
By Dezan Shira & Associates, Hanoi
Editor: Zolzaya Erdenebileg
Vietnam has experienced considerable economic
development over the past two decades.Within that
period of time, the country has had one of the fastest
GDP growth rates in theworld, averaging 6.2 percent
from2000 to2015, transforming it intoa lower-middle
income country. It has been largely successful with
its transition to a market-driven economy thus far,
generally keeping unemployment rates at around
two percent. In the first quarter of 2016, Vietnam’s
unemployment rate remained stable at 2.25 percent.
However, while Vietnam’s GDP growth is impressive
and participation rates in its labor markets is high,
there are a number of inherent problems and
limitations in its labor force, particularly with skills
shortages andunbalancedwagepremiums incertain
sectors. These must be fully understood by foreign
companies looking tohire in the country. Inparticular,
firms have to be aware of how contracts work in
Vietnam, and the legal obligations that they have to
their employees.
Economic trends
GDP growth
Despite ongoing uncertainty in the global
economy, Vietnam has continued to perform
well. In 2015, Vietnam continued its streak of fast
growth, reaching 6.7 percent, and is forecasted to
achieve 6.2 percent growth in 2016. Conditions are
expected to slightly improve year-on-year in 2017,
with a projected GDP growth rate of 6.3 percent.
Wage growth
Alongside Vietnam’s impressive economic growth,
average andminimumwages have risen to keep up
with the consumer price index. Between 2005 and
2015, average annual income of employedworkers
across major sectors grew almost 75 percent.
Average income increased from just US$1,658 in
2011 to US$2,613 in 2015, including 3.63 percent
growth from 2014 to 2015.
2011
2012
2014
2013
2015
2016*
Vietnamese GDP vs Wage Growth (2011-2016)
Average Wage (US$)
GDP Growth (%)
6.2%
5.2%
5.4%
6.0%
6.7%
6.2%
500
1000
1500
2000
2500
3000
*Estimate
Source: World Bank & General Department of Statistics Vietnam
1,658
1,961
2,257
2,414
2,501
2,613