Thanks to the application of technology, Hue Textile and Garment Joint Stock Company has optimized labor productivity. Photo: Hai Thuan

Challenge

To successfully achieve the two 100-year strategic goals, the Politburo has recently issued many important, strategic resolutions related to various aspects of socio-economic life. The National Assembly and the Government have been urgently institutionalizing these resolutions to quickly put them into practice, aiming for rapid and sustainable national development. The immediate goal is to achieve GDP growth of over 8% this year, and double-digit GDP growth from 2026 onwards.

While the overall labor force in our country is growing at a slower pace, averaging only 0.96% per year during the 2021-2024 period, increasing the scale, growth rate of GDP, and GDP per capita leaves no other option than to increase labor productivity. Therefore, labor productivity is the ultimate decisive factor in successfully achieving the growth targets set by the Party and the State. Effectively leveraging the opportunities of the Fourth Industrial Revolution, applying artificial intelligence (AI), implementing the three strategic breakthroughs, the breakthrough in science and technology development, innovation and national digital transformation, and selectively attracting FDI... ultimately aim to improve labor productivity. In turn, labor productivity will impact the scale of GDP, GDP per capita, state budget revenue, and the country's potential. Without solving the problem of increasing labor productivity, all the set targets will be difficult to achieve.

In 2024, Vietnam's labor productivity at current prices reached VND 221.9 million per worker, 1.3 times higher than in 2021. At constant prices, labor productivity in 2024 increased by VND 6.7 million compared to 2023. On average, labor productivity increased by 4.53% per year during the period 2011-2015; 6.05% during the period 2016-2020; and 4.84% per year during the period 2021-2024.

The application of modern technology in production contributes to increased labor productivity. Photo: L. Tho

Within the ASEAN region, Vietnam's labor productivity has increased steadily at a high rate, but its scale remains low compared to many countries in the region. Overall, during the period 2011-2023, Vietnam's labor productivity, measured in purchasing power parity (PPP 2021), increased by an average of 5.2% per year, higher than the average increases of Malaysia (1.7%/year), Singapore (1.9%/year), Thailand (1.9%/year), the Philippines (2.8%/year), and Indonesia (2.9%/year). However, Vietnam's current labor productivity level is still very low compared to other countries in the region. Calculated according to PPP 2021, Vietnam's labor productivity in 2023 reached US$24,519, only 11.4% of Singapore's; 15% of Brunei's; 35.5% of Malaysia's; 65.4% of Thailand's; and 85.6% of Indonesia's. Notably, after 14 years, the gap in labor productivity between Vietnam and some more developed countries has tended to increase. Specifically: The difference in labor productivity (calculated using PPP 2021) with Singapore increased from US$168,260 in 2010 to US$190,924 in 2023; similarly, with Malaysia it increased from US$42,465 to US$44,526. Conversely, the gap in labor productivity between Vietnam and some countries has tended to decrease: Compared to Brunei, it decreased from US$177,651 to US$137,498; Japan, from US$70,996 to US$60,810; Thailand, from US$16,504 to US$12,957; and Indonesia, from US$6,947 to US$4,133.

Thus, Vietnam's labor productivity has improved significantly and narrowed the relative gap with some more developed ASEAN countries, but it remains low compared to some countries in the region. This shows that the Vietnamese economy will face significant challenges in catching up with other countries in the coming years.

Salary increases must be accompanied by efforts to create wealth and material possessions.

There are many reasons for Vietnam's low labor productivity and its significant gap with other ASEAN countries, such as: an unbalanced labor structure by sector, a high proportion of labor in the agricultural sector where productivity is low; a high rate of informal labor, mostly unskilled, seasonal, and unstable work. In addition, economic growth is primarily based on expanding the scale of labor-intensive industries with low technological content and added value. While the business sector contributes significantly to GDP growth, the majority are domestic enterprises, mostly micro and small-scale, operating in relatively low-productivity sectors, and primarily focused on simple production for the domestic market. The workforce does not meet requirements, the integration capacity of Vietnamese labor is low, and skill levels are low; machinery and equipment are outdated and slow to innovate…

According to statistics from the International Labour Organization, the legally mandated monthly minimum wage in Vietnam, calculated in purchasing power parity (PPP 2021), reached US$543 in 2022, 4.2 times higher than in 2010. Although the rate of increase in Vietnam's minimum wage is higher than other countries, the absolute figure is low compared to more developed countries. Vietnam's minimum wage in 2022 was higher than the Philippines (US$397) and Laos (US$323), but only 34% of Japan's, 26% of South Korea's, 54% of Malaysia's, and 72% of Thailand's. Therefore, Vietnam needs a roadmap to gradually increase the minimum wage to align with more developed countries in the region to ensure a decent standard of living for workers, create incentives to boost labor productivity, and narrow the gap with more developed nations.

Solving the problem of increasing labor productivity is always a vital issue for every economy in general and for our country in particular. To escape the middle-income trap, to stand shoulder-to-shoulder with the world's leading nations, and to successfully achieve the two strategic goals set for 2030 and 2045, there is no other way than to find ways to improve labor productivity. Every worker needs to strive to produce more wealth and material goods for themselves and for the country.

Tuan Ha

Source: https://huengaynay.vn/kinh-te/cai-thien-nang-suat-lao-dong-158690.html