|Vietnam will gradually extend the retirement age for women by 5 years and 2 years for men after the National Assembly approved several amendments to its current Labor Code, reports Bloomberg / Photo by: James Mason-Hudson via Wikimedia Commons|
Vietnam will gradually extend the retirement age for women by 5 years and 2 years for men after the National Assembly approved several amendments to its current Labor Code, reports Bloomberg.
Retirement age extension
Men can now work until they’re 62 years old by 2028 and women until 60 years old by 2035. The current retirement age for males is 60 years old and for females 55 years old. Under the Labor Code amendment, the workers’ retirement age will increase by 3 months yearly for men and by 4 months each year for women beginning 2021.
Amendments in Vietnam’s Labor Code
Backed by 90% of the Vietnamese lawmakers, the amended law aligns their legal framework to international labor standards. It also responds to the demands set by the “milestone” free trade agreement entered into by the country. Included in the reform are the protection of younger employees, mechanisms to address workplace discrimination, and strengthening the employees’ collective bargaining rights.
The new provisions in Vietnam's Labor Code expand the coverage of the Code from 15 to 56 million people as legal protections are also offered to employees not covered by contracts, shared Latin American news agency, Prensa Latina.
Vietnam’s Elderly Population to Double
The Japan International Cooperation Agency (JICA) and the World Bank launched a knowledge-sharing program in August to assist the Vietnamese policymakers in developing new models for their aging population and the elderly care services. In a statement, JICA and the World Bank said that the elderly citizens of Vietnam will double to 14% of its population in 17 years. Moreover, Vietnam will be an aged society by 2035. Comparing the threshold of Vietnam’s population to be considered aged, it took Thailand and Singapore 20 and 22 years, respectively, to reach such a threshold.
The World Bank Country Director for Vietnam Ousmane Dione said that the rapid population aging in the country will have significant fiscal, social, and economic implications. “Vietnam needs to start preparing for an aging society,” Dione added. This can be achieved by developing a financially and comprehensive health and social care service system that will provide them the care that they need.
Bloomberg has also detailed that the workforce of Vietnam has declined by more than half, which is about 400,000 every year compared to the average 1 million in the past.
Meanwhile, the amended Labor Code of Vietnam details that employees who work in harmful environments, with reduced work capabilities, or are exposed to difficult conditions can take their retirement five years earlier. On the other hand, employees with special professional skills or with high qualifications can choose to work five years longer. Because of these modifications in their labor law, the International Labor Organization (ILO) praised the government’s move as they become more in line with the international basic rights of employees. ILO noted that the amendments will help the workers as they can “benefit fairly from economic progress.”
Vietnam’s ILO director Chang-Hee Lee said that the legitimization signifies an important advance in the field of labor and it also creates a “solid basis” for the development and integration of Vietnam’s trade.
|Vietnam will be an aged society by 2035. Comparing the threshold of Vietnam’s population to be considered aged, it took Thailand and Singapore 20 and 22 years, respectively, to reach such a threshold / Photo by: JoAnn Moravac via Wikimedia Commons|
Employment by Sex and Economic Activity
ILO stated on its site that there will be 11,246 male workers and 11,180 female workers in the agriculture sector by 2020. In the non-agriculture sector, it would be 18,419 male workers and 16,497 female workers. In the services sector, there will be 9,505 male workers and 10,584 female workers.
Database company Statista also shared that in 2018, the distribution of employment in Vietnam was as follows: 39.8% agriculture, 25.81% industry, and 34.4% services. Since 2008, labor productivity in the country has increased.
Vietnam's General Statistics Office said that the average monthly salary in the country in 2017 was VND6.6 million, equivalent to $290 in the US dollar. This is already an increase of 9.3% compared to the 2016 average monthly salary. Cities with the highest average salaries include Ho Chi Minh City, Da Nang, Binh Duong, Bac Ninh, and Hanoi. Although the employed laborers in fishery, forestry, and agriculture decreased in 2017, the construction and industry witnessed an increase. The services sector also saw an increase from 17.8 million in 2016 to 18.3 million in 2017.
Labor force distribution
Nearly half the total workforce in Vietnam accounts for people who are aged between 15 and 39 years old. There are also around 32% employed laborers working in urban areas and the rest were in rural areas, according to business, legal, and tax news sources Vietnam Briefing.
The labor-intensive sectors of Vietnam are the growth drivers for the country’s economic development. Raising the retirement age is a good idea, considering the country’s retirement security. This means that workers can opt to save more money before they retire and shorten the period to go without wages. Aside from that, it also enhances the overall fiscal picture because of income tax revenues and labor market incentives. Everyone benefits and the economy grows.
|Nearly half the total workforce in Vietnam accounts for people who are aged between 15 and 39 years old. There are also around 32% employed laborers working in urban areas and the rest were in rural areas / Photo by: UNIDO via Flickr|