Labor market in the mekong delta region

The labor market is part of the supply market of elements for production.The size, capacity and level of organization of the labor market directly affect itsability to balance between th

NGUYEN VAN DUNG

LABOR MARKET AT MEKONG DELTA

Course : Political of Economy

Number : 62 31 01 01

SUMMARY OF ECONOMIC DOCTORAL THESIS

HA NOI - 2014

at Ho Chi Minh national academy of Politics

Supervisor: Vice Prof, Ph.D Nguyen Khac Thanh

Examiner 1:

Examiner 2:

Examiner 3:

Thesis will be presented at Grading Thesis Council of Academy,

meeting at Ho Chi Minh National Academy of Politics

Hanoi, Date Month Year 2014

Thesis can be found at National Library and Ho Chi Minh National Academy of Politics

1 The urgency of the studied issue

Labor force is an important input to all activities that produce wealth andmaterial for society Along with other kinds of market, the labor market is anorganic component of the national economy The formation and development of thelabor market in relation to an overall relationship of types of market is objectivelyessential in a market economy

In a market economy, the arrangement of labor supply for the operation ofthe economy as well as its components is mainly carried out through the labormarket The labor market is part of the supply market of elements for production.The size, capacity and level of organization of the labor market directly affect itsability to balance between the supply of labor force and other elements ofproduction, and with outputs in the process of the operation of the economy.Therefore, the growth of economic systems is always linked to the existingsituation of the economy, its ability to change in terms of size, capacity and level

of the labor market in each period

The existing status of the economy and its ability to transform the labormarket depend on its organization of market and its operational mechanism Itinvolves operational organization of participants in the market abiding by inevitablerelations of market and objectively operational mechanisms Accordingly, theState’s participation and intervention through appropriate policies into theorganization and operational mechanisms of the labor market is necessary in amarket economy with orientation Such intervention is aimed at perfecting theorganization and the operational mechanism of the labor market and therebypromoting its role in the growth of the economic system

The process of doi moi (renewal) and economic growth in Vietnam has steps

by steps been shaping and developing the labor market within systems of the marketwhich supply the elements for production The emergence of the labor market,which plays the role of labor supply, has made a positive impact on the contents ofsocio- economic development of local economies as well as of the nationaleconomy However, the evolution of the labor market over the recent past time wasquite complex, spontaneous and largely beyond State’s controls Such evolvementhas not only made a negative impacts on the contents of socio-economicdevelopment but also affect the ability to develop the labor market on the demand

of synchronous shaping of systems of market in the process of developing asocialist oriented market economy Such realities pose a demand for studies,perfection of theory on the labor market, that is, the organization of the labor marketappropriate to the content of evolution and development of socialist oriented market

economy in general and appropriate to distinctively economic zones in particular,including Mekong Delta region.

In reality, the labor market in the Mekong Delta region has been shaped andsteps by steps growing The development of the labor market in the Mekong Deltaregion has contributed to the allocation of labor resources among sectors andlocalities in an appropriate way, to the promotion of economic restructuring,employment structuring in a right direction, and to the growth of economy.However, problems related to the process of developing the labor market in theMekong Delta region always arises, which needs to be solved, including:

- Although the existing size of population and labor force in the MekongDelta region is relatively large, and despite positive changes in the quality andstructure of the labor, it does not meet the needs in terms of labor for socio -economic development, causing a serious imbalance between supply and demand;

- The system for supports in terms of transactions on the labor market is stilllimited The vocational training centers and job agencies in the region are high inquantity but low in quality, due to the fact that they primarily focus on vocationaltraining, not on job consulting and job introduction Activities take place at job fairshave not met the demand of find seekers and employers;

- System of information for the labor market has been underdeveloped, doesnot meet market requirements;

- The flow of labor migration with great scale and frequency occursfrequently; especially, the migration between rural - urban areas and labor migration

to the outside of the region are spontaneous Meanwhile, the management of freemovement of labor is inadequate, leading to security - social instability

- The fast speed of urbanization leads many agricultural laborers to lack ofunemployment or job loss while there are no plans to train these laborers to helpthem switch jobs;

- Policies that ensure employees’ benefits are not paid adequate attention, that

is, low incomes yet high costs of housing, living become barriers, which causes notonly many workers to go elsewhere to find jobs, but also frequent occurrence ofconflicts of benefit, labor disputes

With the above-mentioned reasons, the issue here is how to organize the labormarket in the Mekong Delta region that is capable of ensuring the supply of laborand meeting labor needs, limiting a tendency of spontaneity of labor migration,reducing the negative impacts of the labor market to socio-economic development

in the region At the same time, the issue of how to build a system of mechanismsand policies which are appropriate, not only distinctive but also feasible in order todevelop the labor market in the Mekong Delta region is now necessary This is the

very ground that I, as a the PhD candidate, would like to choose "The Labor

Market in the Mekong Delta region" as my PhD dissertation in the field of

Political Economy

2 Objectives and tasks of the dissertation

2.1 The objective of the dissertation

On the basis of the systematization of theoretical and empirical issues onlabor markets, the dissertation focuses on analyses and assessments of changes inthe labor market of the Mekong Delta region From then, the dissertation proposes anumber of solutions to the development of the labor market of the Mekong Deltaregion in the upcoming time

2.2 The tasks of the dissertation

To achieve the above-mentioned objectives, the dissertation shall:

First, systematize and analyze the theories as well and the practicality of labormarkets;

Second, study and sum up experiences of the development of labor markets

in some economic regions nationwide, then draw lessons of experiences for thegrowth of the labor market in the Mekong Delta region;

Third, analyse and assess the existing status of the labor market in MekongDelta region with special characteristics Basing on that, the dissertation states itspoints of view and proposes some solutions for the development of the labor market

in the Mekong Delta region towards 2020

3 Objectsts and scope of the research

3.1 Objectts of the research

The dissertation studies the labor market from the perspective of politicaleconomy, mainly studies about the supply - demand relationship on labor marketsand the operational mechanisms of labor markets

3.2 Scope of the research

- Period: the studies on the labor market of the Mekong Delta region with anemphasis on data limited to the period from 2000 to 2011, the suggestion ofsolutions proposed for the period towards 2020

- Space: the studies on the labor markets of provinces and cities in theMekong Delta region

4 Approach and methodology of the research

4.1 The approach of the research

The dissertation studies the labor market in the Mekong Delta, which is based

on the following approaches:

- The labor market of Vietnam in general, including the labor market of theMekong Delta region in particular, is a kind of markets in the market economy.Therefore, it is studied, analysed, which is based on the objective rules of economy

- The objective of developing labor markets is to liberate the productiveforces of labor, rationalization of labor allocation; therefore, the object of theresearch has to be put under the development of productive forces and internationaleconomic integration.

4.2 The methodology of the research

* Theoretical studies:

The dissertation used basic methods of Marxist - Leninist political economy,with reference to a number of theories on economics, developmental economics; itwas also based on the doi moi points of view and directions reflected in documents

of Communist Party of Vietnam Congress, and of provincial and city-level Partycongresses in the Mekong Delta region, the findings of previous several researchprojects related to the dissertation Basing on these, the author built a theoreticalbasis for the research topic of the dissertation

For analytical - synthetic methods, the dissertation used questionnaires tocollect employees’ view on relevant issues Due to the limitations of time andfunding, the dissertation only surveyed 600 employees of 6 provinces and cities

in the Mekong Delta region, including Can Tho, Hau Giang, Dong Thap, Long

An, Tien Giang, and Ben Tre At the same time, the dissertation also usedexpert methods in which 90 leaders, managers of agencies and businesses based

in the Mekong Delta region were interviewed to serve as a source of materialsfor the studies

5 New contributions of the dissertation

- Systemizing theories on the labor market which is based on the inheritanceand acquisition of Karl Marx's theory of value - labor, systemizing theories on laborand the labor market by economists, and previous studies in order to introduce theconcept of labor market

- Formatting a theoretical framework, including key concepts related to theoperation and development of the labor market Analyze and evaluate factors thatobjectively impact the labor market and build systems of institutions and tools toregulate the labor market

- Basing on the experience of developing the labor market in some Asiancountries and the results of developing the labor market in some economic regions

in Vietnam, the dissertation generalizes some experiences that can be applied todevelop the labor market in the Mekong Delta region.

- The dissertation analyzes the advantages and disadvantages of natural andeconomic - social conditions that affect the labor market and operational existingstatus of the labor market in the Mekong Delta region Basing on these, thedissertation suggests what problems should be solved in the labor market of theMekong Delta region

- Basing on the natural and economic - social characteristics of and theexisting status of the labor market of the Mekong Delta region, the dissertationprovides a basis of orientation and proposes 4 groups of solutions so as to promotethe development of the labor market in the Mekong Delta region towards 2020

6 Structure of the dissertation

Besides the introduction, the conclusion and bibliography, the thesis isstructured into 4 chapters and 11 parts

Chapter 1 OVERVIEW OF RESEARCH LABOR MARKET

The purpose of this Chapter is to study the works related to the thesis in order

to determine the theoretical and practical labor market, from which showing thetheses issues need further study To ensure inheritance and affirm the contributions

of the thesis, dissertation divided the relevant scientific product categories:publications (domestic and foreign) Ph.D thesis and scientific topics; specializedjournals Based on this classification, the thesis shows that the study of the labormarket in Vietnam is still very small In Mekong Delta region, there has not studiedabout the labor market here yet Therefore, the inheritance and collection of theresults from scientists, to add to the available range that is determined as thesisresearch development next, with the following contents: 1) chemical system,additional analysis and clarification of the rationale for the labor market, andclassification approach this particular type of market; 2) features different labormarket than any other market in the market system, the factors affecting theconstituent parts of the labor market; 3) matching the experience of marketdevelopment effort the nature of labor, the development of the region in acomprehensive system of national market economy transformation is still quite newproblems need intensive research; 4) connecting the development experience labormarkets in some countries, an overview of the results of labor market regions naturearea in the development of the system of nation's market economy is thetransformation still relatively new issue in-depth research is needed

Chapter 2 THEORETICAL AND PRACTICAL BASE OF LABOR MARKET

The goal of this chapter is to systematize the theoretical issues and practicallabor market To achieve this goal, the thesis focuses on the following issues:

2.1 Some general common problems in the labor market

2.1.1 The concept of labor market

On the basis of the concept of labor market researchers, thesis analysis withdifferent ideas, including the way that show is not correct about labor market.According to the thesis, each explains has its own nuances derives from theauthor's approach:

- Some authors present on the perspective of assessing employment status togive a definition of the labor market definition emphasize the relationship inregulating employment Here, the labor market is a generalization definition, is thecontract that the demand - supply of labor are tied together;

- Some authors emphasize institutional issues of the labor market; considerthe labor market on the basis of assessment of the labor movement under the impact

of the system of social relations, economic institutions - given society;

- Other authors emphasize the relationship in regulating employment whenmaking the concept of the labor market

- Another the author based on Karl Marx’s opinion This point stated: labor isgoods and such as objects of exchange, buying and selling on the market tointroduce the concept of the labor market;

There is still no uniform called “labor power market” and " labor market ".Labor market in terms of terminology is not entirely accurate, but in fact still usepopular terms rather than using the term “labor power market " Thus, although thewording is “labor market ", but need to understand here is “labor power market "

According thesis can understand overview of the labor market as follows:The labor market (or labor power market) is where the social relations betweensellers of labor (workers employed) and buyers of labor (labor power users),through the form of agreement on price (wages and salaries) and other conditions ofemployment, on the basis of an employment contract the writing, orally, or throughthe form of contract or agreement khac.Voi the approach of the thesis, the concept

of labor market fully reflects aspects: 1) consistent with approach to the labormarket of specialized political economy; 2) adequately reflects the fundamentals ofthe market; 3) Consistent with the objective requirements of the market economy,the requirements requires synchronous development of the market categories inwhich the labor market is an important component

On the basis of these concepts, the thesis continues to present the contents oftheoretical knowledge about the labor market:

2.1.2 Classification of labor market

Depending on the criteria and research purposes, the labor market is divided

in many perspectives, the thesis provide basic division: division a legal perspective;management perspective, on the extent and nature of the market, according to thenature of the market, according to the geographical perspective, skill, according tothe level of development of market institutions; And there are many othermethods of distribution such as divided according to the level of maturity and scale

of the market regulator, divided by gender, division management level…

2.1.3 Characteristics and role of labor market

Thesis overview and basic characteristics of the labor market, such as:

* Characteristics of the labor market

First, the goods exchanged on the labor market are particular goods.

Second, the exchange of goods - labor has many differences compared with

the exchange of goods and other material

Third, the price of labor in the labor market due to supply relationships

-demand identifying labor needs However, price is not the only signal to adjust thesupply relationship - for labor

Fourth, prices of goods and labor are relatively stable and less likely to

respond flexibly to fluctuations in demand - supply on the market as othercommon goods

Fifth, in relation to transactions on the labor market, rather weak position in

negotiations always belongs to the employee

Friday, in the process of buying - selling, using labor can to build the labor

positive relationship

* The role of labor market

- Labor market ensures jobs for the population economic activity regularly,connecting them to the manufacturing sector and services, enabling them to receiveincome that help them to improve themselves, as well as to feed his family

- Labor market provides sufficient information for both employees andemployers

- Labor market promotes competition among workers to facilitate theexpansion of professionally employed, professional development and synthesiscapabilities for employees

- Labor market secures the division and reorganization of economic activity

of the population regularly in case the reform, restructuring the economy

- Labor market increases the mobility of labor between firms in an industry,across industries and regions together.

2.1.4 The elements of labor market

Supply of labor

Labor supply is the number of economically active population often, bedominated by factors of population size, migration rates, labor rates and otherfactors are economic, cultural, another society In which workers sell their labor in

a given time with a remuneration agreement

Labor supply is affected by factors, including factors on population andmigration, economic factors, cultural factors - social

Labor demand

Labor demand is the requirement for labor in order to meet therequirements of economic development, the ability to attract labor in theeconomy On the labor market, labor demand is the amount of labor that tenantscan rent at acceptable prices

Labor demand depends on factors such as changes in the volume ofproduction of the economy, productivity, economic situation, the price of goods onthe labor market; difference exchange rates of other resources, and the regulations

of the regime, the state's policy

Price of labor

- On the labor market, wages and salaries are the price of labor

- Factors affecting wages, such as bow ties - the demand for labor,commodity prices and services to meet consumer demand in the market, thepolitical factors - social

Competition in the labor market

The operation of the labor market has created competition on this market: It isthe competition between buyers and seller of their labor, competition among buyers

of labor, competition between those who sell their labor together which affects theprice formation of labor

Competition is an important factor of the labor market, enterprises engaged inthe labor market or as a competitor or as a complete monopoly Depending onmarket conditions, but they may change accordingly

2.1.5 Institutional system, organizations and tools to regulate the labor market

Institutional system and organizations

- Institutional system of labor market includes:

+ Legislative system control issues related to employment, namely the Laborlaw, the Trade Union law, Social Security law and the guiding documents of theLabor law.

+ Policies system relates to labor - jobs such as salary policies, wages,insurance policies, employment policies, training policies and training again forworkers, supporting unemployment policies

- The organizational structure of the labor market including: The institution ofstate management of the labor market; representative organizations of workers,organizations representative of employers, organizations professional and socialorganizations, mass organizations and other non-governmental organizations

System tools labor market include: vocational training system; system ofemployment services and systems exporters of labor; statistical information systemslabor market; insurance system society

2.2 Labor market in Vietnam

2.2.1 The basic characteristics of the labor market in the economy market oriented socialism in Vietnam

-The thesis focused on exploiting the basic characteristics of the labor market

in the economy market -oriented socialism in Vietnam as:

Commodity value of labor, as well as the waste of social labor necessary toproduce and re- produce it decides But it is done under the regulation of thesocialist state, the government of the people, by the people and for the people whoare always interested in labor and create conditions for comprehensive developmentthat meets the needs physical and mental requirements for employees to not onlywork, but also gradually improve physical, mental ability in conditions allow

The intervention of state in the labor market through value impact oncommodity labor power embodied in the wages policies of regulations state,minimum wages for workers This is the basis of ensuring equality relationspurchase - sale of labor power and maintain long-term relationships, stability in theproduction and reproduction of labor At the same time, workers are also concerned

by the stimulus through the form of rewards, allowances, distributed through socialwelfare, unemployment benefits, subsidize, policy, so that they an active mind andenthusiastic employees

If the labor market of economy capitalist market, the value of goods usinglabor primarily to satisfy the needs of the capitalists, manifest all relationships -between employing labor and workers during bourgeoisie and proletariat In thecontrast, the labor market - oriented market economy socialist, the form is stillbetween employing labor and workers, but the relationship is improved: the laborseller and buyers are owners of society, in which rights and obligations are

established on the basis of the legal system as: business law, labor law, law onCooperatives, Since then, the number and quality of labors also increased.

The thesis also assess the limitations and weaknesses of the labor market inVietnam, from which, given the direction to develop

2.2.2 Development orientation of labor market Vietnam today

The thesis has launched six major orientation as a basis for development ofthe labor market in Vietnam in the context of international integration:

First, create a synchronous elements of the labor market in terms of domestic

and international integration

Second, ensure distribution of labor to meet the needs of economic

development, thriving labor market official, paying special attention to businessdevelopment in large urban areas, the major economic regions, industrial parks,export processing zones, supporting workers in areas in order to reduce thedifferences between urban and rural areas, between economic regions, betweendifferent types of businesses, among groups of workers skills and no skills

Third, in the current period is to develop strategies based on sectors that is

using a lot of labors, export-oriented, promote the comparative advantages andpotential of the workforce but gradually eliminate dependent on cheap labor andlow skills, the next stage focuses on the needs of human resources for thedevelopment of industry, services and technologies required to achieve the highskill level of labor productivity central regional average

Fourth, improve the quality of human resources through promoting skills

training, practice capabilities, system development education and training to meetthe needs of the labor market in the country and the need lifelong learning needs ofthe people, standardized quality training according to international standards

Fifth, ensure freedom of choice of employment and to promote labor mobility

to meet the needs of economic restructuring towards industrialization andinternational economic integration, construction of infrastructure labor market andinstitutions providing public services effectively

Sixth, strengthen social welfare for workers while working and when

switching jobs

2.3 Experience in the development of labor markets in some Asian countries, some regions of Vietnam Economic and lessons learned for the Mekong Delta

2.3.1 Experience developing labor markets of some Asian countries

The thesis focused on analyzing the development experience of the labormarket of Asian countries such as Japan, China, and Thailand According to thethesis, these countries are more successful resolution of labor and labor market

conditions and economic transformation currently in the development process Inaddition, similarities in culture, geography, the potential virtues of hard-workers, arethe elements that thesis option these countries.

2.3.2 Development of the labor market in some regions of Vietnam economy

The thesis focused on analyzing the development experience of the labormarket some economic regions in Vietnam such as: 1) Convert the economicstructure, employment structure, developing the labor market in the Red Delta tomeet the requirements of industrialization and modernization shorter style; 2)Promote the development associated industrial complex - services - tourism andhuman resources training, create marketing breakthroughs to navigation the laborforce in Central Coast meet the requirements of economic restructuring towardsmodernization; 3) Enhance the quality of education, human resource development,promoting connections supply - demand creates new sustainable labor market in theSouth East

The reason for choosing thesis development experience labor market of theRed Delta, Central Coast and South east regions, because according to the thesis,these economies has achieved great success in in the development of the labormarket last time It also has many similarities to natural conditions, economic -social with the Mekong Delta region

2.3.3 Experienced lesson in developing the labor market for Mekong Delta region

Based on the experience of the economic zone in the country, the thesis drawssome lessons for Mekong Delta region can consult, apply to developing the labormarket as follows:

First, need to recognize more fully the role of the labor market for the process

of economic restructuring

Second, respect the principle of uniformity of both supply factors - labor

demand in the construction of strategic economic development and labor market

Third, to develop a high quality workforce to meet the requirements of

economic development and international integration

Fourth, connect supply - demand fair labor, there is a combination of

employees - business-employers Provide information, manpower forecasting,overcoming the “imparity”on the labor market

Fifth, construction of mechanisms and policies to create a favorable

environment to attract resources to developing the labor market

Sixth, the implementation of links created breakthrough economic

restructuring, improve the quality of labor resources, and divert the labor market in

a reasonable manner