Labor Imbalance Causes Unemployment in Laos

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Construction Industry Labor Shortage Causes Unemployment in Laos (Photo: ILO)
Building work on a new school in Luang Prabang, Northern Laos. Putting cement on the wall

An imbalance in the supply and demand of labor in some sectors poses a challenge for Laos in its efforts to tackle rising unemployment.

“The government has acknowledged that there is a mismatch in the supply and demand of workers in some areas,” Vientiane Times reported on August 19. “This poses a challenge for the government in its attempts to lower the unemployment rate.”

In particular, the construction industry in Laos is suffering from a shortage of Lao workers, the paper added, quoting a study by the Ministry of Labour and Social Welfare.

The demand for such workers in the construction industry for this year is expected to reach 4,400, but only 1,350 are available, according to the study.

The study indicates that both the government and the industry should nurture more skilled Lao workers to secure supply.

Laos is witnessing a construction boom amid the government’s promotion of public and private investment in the construction of roads and railways.

Large-scale infrastructure developments such as hydropower plants and railways have also triggered a high demand for construction workers, but much of the labor force for such projects are foreign workers.

Vientiane Times noted that more jobs could be created for Lao nationals with the government’s efforts to nurture skilled local construction workers and it could reduce reliance on foreign workers.

Apart from the construction industry, the country’s agricultural sector is also struggling to secure enough workers.

About 2,500 workers are needed in the agricultural sector this year, while only about 1,600 are available, the study said.

In contrast, some industries, including manufacturing, electricity and water management, finance and insurance, and communication and transport, have seen a surplus in the supply of labor; higher than demand.

“One of the problems is that most young people want to take courses in administration and management, for which the number of available jobs is minimal,” Vientiane Times explained.

In Laos, unemployment is among the top issues when comparisons are made with the success of other ASEAN member countries, and observers believe this is because local job seekers have difficulty accessing information about available positions.

Statistics from the Ministry of Labor and Social Welfare show that as much as 9.4 percent of the workforce, representing about 182,000 people, are unemployed.

In an effort to tackle the issue, the Lao government teamed up with the country’s largest employment website operator, 108 Job, in July.

Under the partnership, the two parties agreed to jointly develop a labor market information system to upload employment vacancies on both the ministry’s www.lmi.molsv.gov.la and 108.jobs, which will provide information about companies in Laos with job vacancies in different sectors.

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