Vietnamese workers hesitate to return after Covid outbreak

Thu Trang traveled to Ho Chi Minh City, Vietnam in 2019 excited to find a factory job. She worked eight-hour shifts and was guaranteed overtime pay, and the pay was almost three times what she had earned as a farmer in her country.

But during a Covid-19 outbreak this summer, the factory where she worked to make Adidas, Converse and New Balance shoes all but closed. She and her colleagues were forced to live in a cramped apartment for nearly three months, eating a diet of rice and soy sauce. In October, when restrictions eased as problems in the global supply chain increased, Thu Trang decided that she would pack her bags and return to her home province, Tra Vinh.

Her manager promised her higher wages, but she didn’t bother to know how much.

“Even if the company doubles or triples our salaries, I insist on going home,” said Thu Trang, who asked to be identified only by her first name because she feared reprisals from her company and the government. “Ho Chi Minh City was once a destination where we looked for our future, but it’s no longer a safe place.”

Just last year, Vietnam’s coronavirus controls were hailed by health officials around the world. The country has been so successful that it recorded the highest economic growth in Asia last year, at 2.9%. That prospect has darkened: Workers have fled their factories, executives are struggling to get them back, and economists predict that a full recovery in production will not happen until next year.

For consumers, the labor shortage is likely to exacerbate delays for global manufactures caused by a global shipping crisis and month-long factory closures in the South Asian country. East. It could mean a longer wait for Nike sneakers, Lululemon yoga pants and Under Armor tank tops before the holidays. Several US retailers have already turned to suppliers in China to ease the crisis.

In 2020, Vietnam kept a lid on infections. Authorities have relied on strict quarantine measures, contact tracing and lockdown. They assumed they had time to order vaccines, until infections and deaths increased in the summer with the arrival of the Delta variant.

Officials in Ho Chi Minh City and Binh Duong told factories workers had to conform to the “three-in-place” model, which meant eating, living and working had to be done on the factory premises.

Factory managers rushed to provide tents and toilets for their workers, which were crammed into warehouses or parking lots. Local media reported that hundreds of workers at several factories were infected. Many companies felt that they could not afford the costs of housing their workers, so they stopped production. Suddenly, thousands of workers found themselves without income.

Do Quynh Chi, director of the Research Center for Employment Relations, which studies labor trends in Vietnam, said 60 percent of the 300 workers she surveyed in the last week of September told her they wanted to return to their job. village of origin after realizing that they lacked a safety net in the city.

“They want to recover emotionally,” Ms. Do said. “After 10 weeks of confinement, they are totally exhausted. “

The problem has rocked an industry that has become the world’s second-largest supplier of clothing and footwear after China. Over the past decade, international brands have flocked to Vietnam, attracted by a relatively stable government, low costs, and workers renowned for their sewing skills.

In recent years, the country has also benefited from the trade war between the United States and China, which has forced American companies to look elsewhere for their manufacturing operations abroad.

The labor shortage is now more severely 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. About 1.3 million workers left for their hometowns from July to September, according to government data.

After restrictions were eased in October, “hundreds of thousands” of workers followed, according to local officials.

In Ho Chi Minh City, the total number of workers in export processing zones and industrial parks is now around 135,000, down 46%, according to Pham Duc Hai, a senior official in charge of efforts to prevention of Covid-19 in Ho Chi Minh City.

Managers have launched calls promising higher wages to bring workers back. On October 22, the Ho Chi Minh City government said it would provide free transportation and accommodation for the first month to workers who were ready to return.

The measures have had some success. Ninety percent of Pouyuen Vietnam’s workforce returned to Ho Chi Minh City, according to Cu Phat Nghiep, the company’s union president.

But Doan Thi Bich Tram decided not to return. “Why would we stay after they left us in our most difficult time in the midst of the pandemic?” Said Ms. Doan, 29, who sews gloves for the Hung Way Factory, a supplier of Patagonia and other brands.

Ms Doan said when the government imposed restrictions on the coronaviruses, she went for days without food and only received around $ 130 for August and September from local authorities. The subsidy was not enough for him to pay the rent. She said she was waiting for the company to approve his resignation.

“My trust in the authorities is gone,” she said. “They failed to effectively control the pandemic, causing many people to die from infection and starve.”

Retailers in the United States have warned of production delays in Vietnam, which could affect gift deliveries during the Christmas season.

Nike cut its revenue growth forecast for 2022, saying in September it had lost 10 weeks of production because 80 percent of its shoe factories were in southern Vietnam and nearly half of its clothing factories in the country were closed.

In earnings calls, Chico’s, a Florida-based womenswear manufacturer, and Callaway, the golf company, said they have moved some of their production out of Vietnam.

Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, said many companies are looking for workarounds and other remedies to help relieve stress.

“American businesses see what they can do,” Sitkoff said. “If we charter buses and send them to any province and hometown, will that help us bring people back? “

US companies have pushed the Vietnamese government to speed up its vaccination program, which they say is essential for workers to feel safe. Only 29 percent of the population have been fully immunized, one of the lowest rates in Southeast Asia. Vietnam says it hopes to fully immunize 70 percent of its population by the end of the year.

Nguyen Huyen Trang, a 25-year-old employee for Changshin Vietnam, a major supplier to Nike, is fully vaccinated but said she was still concerned that she would be back in the factory. Ms. Nguyen and her husband returned home to Ninh Thuan, a province in central Vietnam, of Dong Nai when cases there started to skyrocket in late July. Her husband wants to return to town, but her family is pressuring her to stay.

She said her manager called her in October and offered to raise her salary if she returned. Her response, she said, was “a definite no”.

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