Thu, a factory worker in Binh Tan district in HCM City, said she earns VND6-7 million a month. She has to remit VND2 million to her parents. The money is used to feed her small daughter, now being taken care of by her parents in her hometown of Soc Trang. 

Meanwhile, Thu and her husband live in a rented room in HCM City and go to work every day at a factory in an industrial zone. It costs them VND1.5 million a month for rent.

“The company pays my salary on the 10th day every month. I often run out of money in the last days of the month and I have to borrow money to buy food,” she said “I try to spend sparingly. I buy less food and more instant noodles. When I receive my salary for the next month, I will pay my debts."

Thu said she feels lucky as she still has a job to feed her family and daughter in the countryside. 

Her husband, a worker in the woodwork industry, lost his job and the monthly income of VND7 million after the Tet holiday because the company had few orders. He decided to leave HCM City for his hometown to help his parents graze oxen.

The textile and garment and wooden furniture industries are the most affected industries as workers are sitting idle with few orders.

Tran Thanh Son, a representative of a garment company specializing in products for export to the US, said he previously had orders six months in advance, which meant that he could get orders for June at the beginning of the year. But now, he has only orders for May.

Going back home 

Son said more workers are leaving the city for their hometowns. If a spouse loses his or her job and leaves HCM City, the other spouse working in another company will also leave for their hometown. 

He estimated that 3-4 percent of his 300 workers are resigning each month.

Nguyen Duc Loc, director of Social Life Institute, said a recent survey of 400 people in localities that have a high number of workers in HCM City (districts of Binh Tan, 7, 12, and Thu Duc City), found that 59.5 percent of workers are facing financial problems.

The HCM City Department of Labor, War Invalids and Social Affairs reported that in the first quarter of 2023, 32,355 workers applied for unemployment benefits. 

Of these, 28,618 workers received benefits. A survey of 3,917 enterprises found that 31 percent of businesses have cut staff, or 19,524 workers.

Association reports

Workers’ incomes have decreased as enterprises are facing difficulties. The HCMC Union Business Association (HUBA) pointed out that in the first quarter of 2023, the textile and garment export turnover fell by 8 percent compared with the same period last year. 

The number of domestic orders for export on the spot in the electromechanical industry has decreased by 30-40 percent. 

Small and medium enterprises (SMEs) have to cut working hours, and lay off workers to cut costs to exist.

Exports of fine arts and woodwork have decreased by 15 percent, while the domestic market is also unsatisfactory as interior decoration products in projects are stalled.

“About 40 percent of enterprises in the building material industry are not operating and it is highly possible that many enterprises will go bankrupt by the end of this year,” Huba said.

According to the HCM City Statistics Office, in the first three months of 2023, 9,788 new businesses were set up and 4,467 businesses resumed operation, but 12,621 enterprises suspended operations and 877 completed procedures for dissolution. 

This meant that for every 10 enterprises joining the market, nine were leaving the market.

The average capital of domestic enterprises is on the decrease: it was VND9.1 billion per enterprise in the first three months of 2023, lower than the VND20.7 billion in 2021 and VND15.5 billion in 2022.

Huba has proposed that HCM City agencies, to avoid complacency, become cautious in using data about the on-time rate of documents and the satisfaction rate.

From the perspective of enterprises, the rates don’t truly reflect reality. For example, agencies always use figures about meetings held and the number of documents released, but they don’t assess the actual effects of the work implemented and the attitudes and responsibilities of state officers in the tasks that are supposed to support enterprises.

Minister of Planning and Investment Nguyen Chi Dung said at a recent meeting of the government and HCM City Party Committee that HCM City’s civil servants have caught the "fear of responsibility’" disease.

Tran Chung