Precarious work, many risks
A report recently released by the Hanoi Employment Service Center shows that by 2023, the number of informal workers in the Hanoi market will be 1.89 million (up 15.3% compared to the previous year) and account for 50.17% of the total number of employed workers. Informal workers in Hanoi face many challenges: lower income, lack of rights and protection.
Informal workers are mainly concentrated in occupations that are easy to change and do not require high qualifications such as small-scale services, self-employment or manual labor. Most of them have low education levels or come from rural areas.
Mr. Vu Quang Thanh - Deputy Director of Hanoi Employment Service Center commented that although this is a great resource to help maintain employment for a large part of the population, informal labor creates many great challenges for the economy and society. Informal labor often faces employment risks, does not have clear labor contracts, and has little access to social insurance policies, health insurance or other benefits.
Statistics show that official labor has significantly lower income compared to the official labor.
Low income
During the 2021-2023 period, informal workers had incomes about VND2.4-3.7 million lower than formal workers. This gap was highest among registered business owners and unregistered business owners (a gap of VND9.2 million in 2022). This may reflect the difficulties faced by informal business owners, such as limited capital, unstable consumption markets, or lack of support from government policies.
In contrast, formal business owners have easy access to financial resources and support policies, helping them maintain and even increase their income.
For the group of wage workers, this difference is about 3 million VND, showing a clear income difference between formal and informal workers.
Mr. Vu Quang Thanh commented that the cause of the income gap between male and female workers in the informal sector may stem from many factors; including gender discrimination in the recruitment and career advancement process.
Regarding the above problems, Mr. Le Quang Trung - former Deputy Director in charge of the Department of Employment (Ministry of Labor, War Invalids and Social Affairs) assessed that although the informal labor group is considered "weak", the relevant authorities can completely strongly shift this group to formal labor.
What Mr. Trung worries about most is the social burden when the proportion of informal workers is high. "This group does not have labor contracts, does not have social insurance, is not stable and cannot be managed, so the risks are high...", Mr. Trung said.
