As holidays near, bosses try to coax Vietnam’s workers back to factories
Thu Trang traveled to Ho Chi Minh City, Vietnam, in 2019, ecstatic to get a job at a factory. She worked eighthour shifts and was guaranteed overtime pay, and the wages were nearly triple what she had made as a farmer back home.
But during a COVID-19 outbreak this summer, the factory where she worked making Adidas, Converse and New Balance shoes virtually shut down. She and her co-workers were forced to live in a cramped apartment for nearly three months, subsisting on a diet of rice and soy sauce. In October, when restrictions loosened as global supply chain issues surged, Thu Trang decided she would pack up and return to her home province, Tra Vinh.
Her manager promised her higher wages, but she did not bother to find out how much.
“Even if the company doubles or triples our wages, I insist on moving back home,” said Thu Trang, who asked to be identified only by her first name because she feared retribution from her company and the government. “Ho Chi Minh City was once a destination where we sought our future, but this is no longer a safe place.”
Just last year, Vietnam’s coronavirus controls were lauded by health officials around the world. The country was so successful that it achieved the highest economic growth in Asia last year, at 2.9%.
That outlook has dimmed. Workers have fled their factories, managers are struggling to get them back and economists are forecasting that a full recovery in output will not come until next year.
For consumers, the worker shortage is likely to worsen the delays for global manufactured goods caused by a worldwide shipping crisis and monthslong factory shutdowns in the Southeast Asian country. It could mean a longer wait for Nike sneakers, Lululemon yoga pants and Under Armour tank tops before the holidays. Several U.S. retailers have already switched to suppliers in China to ease the crunch.
In 2020, Vietnam kept a lid on infections. Officials relied on strict quarantine measures, contact tracing and lockdowns. They assumed that they had time to order vaccines, until infections and deaths surged in the summer with the arrival of the delta variant.
Officials in Ho Chi Minh City and Binh Duong told factories that workers had to comply with the “three on site” model, which meant that eating, living and working needed to be done within the factory’s premises.
Factory managers scrambled to provide tents and toilets for their workers, who were crammed in warehouse buildings or parking lots. Local media reported that hundreds of workers in several factories became infected. Many businesses felt they could not bear the costs of housing their workers, so they shut down production. Suddenly, thousands of workers found themselves with no income.
Do Quynh Chi, director of the Research Center for Employment Relations, which researches labor trends in Vietnam, said 60% of the 300 workers she interviewed in the last week of September told her they wanted to return to their home villages after realizing they lacked a safety net in the city.
“They want to recover emotionally,” Do said. “After 10 weeks of lockdown, they are totally exhausted.”
The problem has shaken an industry that has grown to become the world’s second-largest supplier of apparel and footwear after China. In the past decade, international brands flocked to Vietnam, drawn by a relatively stable government, low costs and workers who were renowned for their sewing skills.
In recent years, the country was also a beneficiary of the U.S.-China trade war, which forced U.S. companies to look elsewhere for their overseas manufacturing operations.
The labor shortage today is most keenly felt in the south. Known as the “locomotive” of the country, Ho Chi Minh City and Binh Duong province are home to two of Vietnam’s largest industrial parks. Roughly 1.3 million workers left for their hometowns from July to September, according to government data.