When a State-Led Union Can Make a Difference

Economic growth in major economies has been hit by a panoply of factors, including the war in Ukraine, inflation and high interest rates. Vietnam has not been spared, as a collapse in global demand for goods such as garments and footwear has caused an employment crisis there. According to statistics from Vietnam’s state-led union confederation, the Vietnamese General Confederation of Labour (VGCL), 472,000 manufacturing workers have been affected. The workers have been hit by job losses, suspensions, and reduced hours, according to VGCL data released at the end of November. There is also a lack of overtime work, on which many workers often rely to bring low wages up to living wage levels. The pain will continue this year.

This is happening before the Vietnamese Lunar New Year festival, Tết, at the end of January. Traditionally, workers get bonuses at this time, which are used to buy tickets home and gifts for families. This year, many workers are facing the grim reality of having no job at all. Many have little to no savings­, and some are even withdrawing their accumulated social insurance savings as one lump sum. They have little choice, however, with immediate costs to meet. This problem has plagued the social insurance scheme for years; it is not set up for huge amounts of withdrawals at the same time.

The VGCL has two structural constraints when trying to respond to this crisis. Firstly, the VGCL is state-led, ensconced in the governing structure and subordinate to the Communist Party. Independent unions are illegal. This does not mean the VGCL cannot stand up for workers, and it generally takes more pro-labour positions than the Ministry of Labour, Invalids and Social Affairs (MOLISA). It does mean, though, that there are huge limitations on the extent to which the VGCL can be autonomous representatives of labour vis-à-vis the state and employers.

Secondly, the issue of mass layoffs is symptomatic of global capitalism, and highlights Vietnamese (and Asian) workers’ exploited position within global supply chains. Factory owners, the direct employers of workers, tend to have tight profit margins, with the vast majority of surplus value extracted going to the companies at the top of the supply chains (i.e., brands in the Global North). Factory owners, therefore, cannot afford to keep workers on their payroll when orders collapse. Thus, the employment crisis cannot be solved within national boundaries, no matter how hard the union may fight. Fundamentally, it requires a restructuring of global supply chains, or a radical shift in the relationship between global brands, direct manufacturers, and workers. This would mean changing the structure of global capitalism, and would require coordinated action from powerful labour and social movements across the world — something which would, of course, face fierce resistance from capital.

Despite these limitations, the VGCL has been active in attempting to help workers, and the Confederation’s activities are illustrative of the organisation’s potential and limitations in general. First and foremost, the VGCL has been trying to keep workers in their jobs, through social dialogue and collective bargaining with enterprises. It has sought to minimise layoffs, even if it means making agreements to increase unpaid leave or reduce the number of shifts. Where this fails, and enterprises do terminate workers, enterprise-level trade unions and local labour federations have been trying to ensure that laid-off workers are given the compensation they are owed according to the law and any enterprise-level collective bargaining agreements. They have also been helping workers look for new jobs.

The VGCL has substantial financial resources, and has also been providing material support to its members. Its president, Nguyen Dinh Khang, has instructed the Confederation to “not let any worker not have Tết”. This has largely been carried out through the provincial-level labour federations. In Binh Duong, for example — an industrial province bordering Ho Chi Minh City in the south of the country — the labour federation has been providing tickets home for migrant workers, as well as modest financial contributions to assist workers to buy gifts for family and other essentials. These initiatives mirror the annual activities of the provincial labour federations, although this year, with more workers needing support, more money will be put into them.

… the employment crisis cannot be solved within national boundaries, no matter how hard the union may fight. Fundamentally, it requires a restructuring of global supply chains, or a radical shift in the relationship between global brands, direct manufacturers, and workers.

The VGCL has also been petitioning the government for national measures and policies, both immediately and over the longer term. This is where being a state-led union can actually turn into a strength. Granted, the VGCL is not always successful if it pushes for pro-labour measures at the national level. But given that it is part of the state structure, it can make its views heard and have some influence in the system. Unions elsewhere in Southeast Asia, in contrast, often find it difficult to even be heard by their governments. The VGCL’s relative weight was validated recently, when Prime Minister Pham Minh Chinh released a circular on 16 December, urging MOLISA, the Vietnam Chamber of Commerce and Industry (VCCI), and the VGCL to do more to stabilise the labour market and protect jobs and incomes.

The VGCL’s undertakings in this crisis are reflective of its role in general. It is largely unable to organise workers in actions against employers and the state; but in times of crisis, the Confederation, embedded as it is within state structures, is able to use its resources and structural position to cushion workers from the worst impacts. This is the case with the current employment crisis, and was also the case during the Covid-19 pandemic. While by no means perfect, it does somewhat achieve this goal.

2023/11