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<16> Re: structural unemployment



NYU Linguistic String Project -- Tue Jul 29 13:21:39 EDT 1997

Dear friends --
(Sonnet Nguyen and Ian Bui also...)

This issue (namely, structural) is interesting to me... I want
to learn more about this... and this is my 2 cents...

  > From listserv@csd.uwm.edu Tue Jul 29 06:58 EDT 1997
  > From: Sonnet Nguyen <Sonnet.Nguyen@fuw.edu.pl>
  > Subject: Re: Vietnamese structural unemployment
  >
  > Hi everybody, (to Mr Ian Bui et al.)
  >

According to the International Labor Organization, the increase
of job creation in Viet Nam is 2.5% while the increase of the
work force is 3%, and in cities, 5% -- cf. Die^~n DDa`n No. 50
(3.1996) (published from Paris, France).  How correct is this
estimate ?

In a multi-sector economy like VN where government subsidies to
state enterprises and offices are greatly tightened and reduced,
massive unemployment results.  According to statistics, between
1986-1994, the state sector eliminated nearly 1 million jobs,
while the non-state sectors, not including the farming sector,
absorbed 2.6 million workers (Vie^.n Tho^'ng ke^).  The Vietnamese
government recently claims around 5% unemployment.  Annually,
there is at least 1 million people coming into the work force.
They are not absorbed by the state sector, but by the non-state
sector (mainly by kinh te^' ho^. gia ddi`nh, underemployment,
etc.)

How does one prove that unemployment is structural ?  Can we
say as a rule that unemployment is structural because it is
"desirable" in a free market economy ?

Observations about the percentage of farmers in developed
countries may not explain the case in VN, because VN has
peasants (seasonal farm laborers,...) and farmers.  How big is
the percentage of farmers in VN compared to that of peasants ?
A wild guess would put the percentage of Vietnamese farmers to
be much lower than rural dwellers.

One thing perhaps is undesirable: the rural population is high
(70+%), population growth rate is high (2+%), agricultural
increase annually is low (around 4%), while light industry
(usually in the urban areas) is over 10% with a much smaller
population.  Thus, it is clear that rural population will become
poorer and poorer.  The number of people in the rural areas
coming into the work force increases (the ILO says nothing about
this). If the Vietnamese government continues to prevent people
from the countryside moving into the cities to look for job, the
rates of unemployment and underemployment in the countryside
increase quickly.

Is underemployment the same as unemployment ?  Note that
underemployment (government employees, for example) has been a
case in VN for years.  Can we say something that has been
happening for years to be a "structural" sign ?  How do we
compute unemployment in the VN ?

If there is a formula whereby we can show the rate of
unemployment in Vietnam increases no matter what, then can we
say it is "structural" ?

Cheers,
Nhan