Lopsided: too many university graduates and too few skilled blue-collar workers

In the shade beneath an overpass in Hanoi, Minh puts his foot down as he stops at a red light. His eyes remain fixed on the phone mounted on his handlebars, where a ride-hailing app is flashing.

Finishing his answer to my question, Minh tells me he has a bachelor's degree in finance, having graduated with good marks.

Less than 300 meters from where Minh stopped, we had just passed the vast construction site of the International Sports Urban Area, a project developed by a major conglomerate. Recruitment notices were posted along the site's perimeter fence. Crew supervisors and drilling rig operators were being offered monthly salaries of VND55-65 million (US$2,125-2,511), while crawler crane operators, excavator operators, welders and electricians could earn VND30-38 million.

It offers a glimpse into the serious mismatch in Vietnam's labor market.

A survey of 400 ride-hailing drivers in Ho Chi Minh City by the Institute for Social Life Studies found that 11% had vocational or college qualifications, while 12% had university degrees. For several consecutive quarters, the National Statistics Office has reported that unemployment among university graduates is several times higher than among workers with intermediate vocational or technical college qualifications. By the third quarter, 1.6 million young people aged 15-24 were neither employed nor in education or training.

The gig economy has inadvertently become a "shock-absorbing trap" for hundreds of thousands of unemployed graduates. It provides immediate income to cover living expenses but at the expense of developing professional skills. These jobs offer no social insurance or opportunities for career advancement, while workers face health risks that take a toll on them day after day on the road.

While young graduates take to the streets to earn a living, major construction companies face the opposite problem.

The CEO of a Ho Chi Minh City construction contractor with projects worth billions of dollars told me that if his company advertised an administrative or in-house accounting position in the morning, it would receive more than 200 applications by afternoon.

On the other hand, finding five crawler crane operators with advanced safety certification or 10 welders experienced in underground structural construction could take his HR department three months.

Even offering monthly salaries of VND35-40 million is not enough to fill the vacancies.

The Vietnam Association of Construction Contractors estimates that the industry needs four million construction workers this year, but the available workforce can meet only about 25% of that demand.

The shortage of skilled workers at construction sites has forced contractors into fierce competition for labor, just as Vietnam is undertaking a series of major national infrastructure works.

The paradox of "too many university graduates driving motorbike taxis and too few machine operators earning thousands of dollars" has its roots in deeply entrenched social prejudices. Working in an air-conditioned office is seen as a sign of success, while wearing protective gear is associated with low-status manual labor.

Many vocational colleges have become universities, opening economics, business administration, and communications programs on a large scale. Vocational schools, meanwhile, have been pushed down the social hierarchy, acquiring a reputation as places "only for those who fail to get into university."

This has fostered the illusion that a degree is proof of competence. But when graduates confront the harsh realities of the labor market, they discover that theoretical knowledge cannot replace the practical skills needed to operate a bored-pile drilling rig worth hundreds of thousands of dollars.

Some of the money invested in higher education is wasted on degrees that serve little practical purpose.

When graduates end up doing jobs that require no qualifications and accept low wages, the return on investment in their education turns negative, draining the savings of middle-class families.

Educated workers, who should be a driving force behind economic development, instead spend four to six of the best years of their youth tied to simple jobs on the streets, with little opportunity to build knowledge or create greater economic value.

Vietnam cannot escape the middle-income trap if it continues to misallocate human resources on a national scale, particularly as the supply of cheap labor dwindles and the country's labor-cost advantage disappears.

The social consequences of this obsession with degrees are unfolding quietly, but they are leaving deep cracks in the social safety net and the psychological well-being of young people.

An "educated precariat" is emerging: People with qualifications but insecure livelihoods.

The enormous gap between their expected social standing and actual earnings creates a sense of status inconsistency, leaving many young people disillusioned and without direction.

A monthly salary of VND65 million (US$2,511) in the cabin of a drilling rig is not available to every manual laborer. It is reserved for highly trained, experienced workers.

But it is a strong signal from the market that an adjustment is needed.

Resolving this paradox requires decisive action from three sides. Germany's dual vocational education and training system, known as Dual VET, is widely regarded as the global gold standard for maintaining industrial capacity and high labor productivity.

Under this approach, major corporations such as Vingroup, Thaco, Hoa Phat, and Coteccons cannot simply post job advertisements and wait for applicants. Instead, they need to take the initiative for establishing vocational training academies through partnerships, covering tuition fees, paying trainees while they gain practical experience on construction sites, and guaranteeing employment with clearly defined salaries and benefits.

The qualifications system must also give greater recognition to technical certificates. A highly skilled construction equipment operator or a grade 7 welder should enjoy the same professional standing as a senior engineer, with clear career progression and reliable occupational social protection.

More important still is a change in social attitudes. Parents and young people need to reconsider how they value different kinds of work. Success is not defined by sitting in an air-conditioned office or wearing a tie. It should be measured by a person's ability to solve problems and what they contribute to the real economy.