Professor Dang Hung Vo: Labor moving from public to private sector is an inevitable trend.

In fact, I think the phenomenon of disinterest in public sector work with the current structure is inevitable. But why is it happening now and not earlier?

Employment is an important element of macroeconomics.

Anyone who knows a little about economics knows very well about the global oversupply crisis in the period of 1929 - 1930, which is considered as the end of the free market theory, that is, the State should not interfere in business. The founder of the theory of using market mechanisms to develop the economy to bring prosperity to the country is Adam Smith (1723 - 1790), a British economist with the famous book "An Inquiry into the Nature and Causes of the Wealth of Nations".

Prof. Dang Hung Vo - former Deputy Minister of Natural Resources and Environment

Smith's famous idea is that the wealth of each country cannot be measured by the amount of treasures in the national treasury, but must be measured by the efficiency of putting those treasures into real business called the market to gain greater profits. Smith also believes that the market needs independence, national leaders do not interfere to "distort" the market.

The market operates on a self-regulating mechanism based on four established rules: the law of supply and demand, the law of competition, the law of value and the law of profit. That is the theory, but in reality in 1929, the law of supply and demand experienced a "limit" situation when supply increased beyond demand without stopping, causing a huge oversupply that forced the surplus goods to be dumped.

Faced with this situation, many economists have analyzed in depth the disadvantages of the free market. The most successful was the British economist John Maynard Keynes (1883 - 1946), who created a system of macroeconomic theory in his work "The General Theory of Employment, Interest and Money", in which employment is an important element of macroeconomics. The market at this time cannot be free but must rely on macroeconomic balance, the key point of which is the balance of the financial market and the labor market.

Talking about economics is still long, this article only wants to introduce the role of labor and employment as a very important factor in the market mechanism, a factor related to macroeconomic balance. Ensuring macroeconomic balance is the responsibility of the State. From here, affirming the concept that "the economy must clap with two hands, the invisible hand of the market and the visible hand of the State". Moreover, currently, countries that want to develop strongly rely on a high-quality labor force associated with technology.

Many workers in the health sector choose to quit their jobs at public hospitals to work at private hospitals. Illustration photo: Duc Anh

Labor from the subsidy period moved to the market

In contrast, 40 years ago, our State used a subsidized economic mechanism to develop the country. Everyone wanted to work for the State and when recruited by the State, they were not only assured of their job but also considered it an honor. That mindset has moved from the subsidized period to the period of operating the market mechanism. Of course, young people have gradually escaped this mindset, but in many families, parents are still passionate about finding ways to make their children work for the State.

During the subsidy period, the State commanded everything, including small food service activities. Entering the market mechanism, the thinking of organizing the management apparatus still followed the old trend, so although the State had a policy of "The State is only forced to do things that the market cannot do", the State apparatus was still too cumbersome, and State agencies still wanted to take on many service tasks that could have been assigned to the market.

Since the early 90s of the last century, the Government has started and gradually promoted administrative procedure reform. By around 2010, the Government had shifted its focus to administrative institutional reform, that is, administrative apparatus reform. However, up to now, both administrative procedures and administrative institutions have shown signs of becoming more complicated and cumbersome, especially in the land sector.

The government has carried out many rounds of streamlining the payroll and reorganizing the administrative apparatus. Unfortunately, these institutional reforms only rely on quantitative criteria, without seeing the necessary quality criteria. As a result, many competent officials, civil servants, and public employees ask to leave, while those with poor qualifications try to stay. If the human resources are weak, even if the organization is small, it will have to "bloat" to have enough people to do all the work!

In 2011, the World Bank, in conjunction with the Danish and Swedish Embassies, conducted a study on corruption in the land sector to serve dialogue with our Government. This study showed that, in addition to major corruption associated with the State's land allocation and leasing mechanism, there is a type of "petty" corruption associated with harassment in the implementation of administrative procedures. It is called "petty" but the quantity is very large, so the total is also very large. I asked a few close friends working in land registration offices why there is such "petty" corruption? Many people sincerely said: "Look, the State's salary is so low, how can we cover modest expenses for our family? We know that getting involved in the industry is bad, but we still have to grit our teeth and work to make a living."

Leaving public for private

The story of a group of workers not keen on applying to the public sector, and those who have already entered want to leave for the private sector has been quite common. At the 4th Session of the 15th National Assembly, many delegates mentioned the increasing number of civil servants and public employees resigning or transferring to the private sector, especially in the fields of education and health. A delegate gave statistics from the Ministry of Home Affairs, in the past 2.5 years, nationwide, nearly 40,000 civil servants and public employees resigned or transferred to the private sector, of which more than 16,000 people in the education sector and more than 12,000 people in the health sector.

Graphics: Diep Thanh

Also at this session, when discussing the Draft Land Law, a delegate said that many officials in the land management sector had also resigned to leave. In the State sector, the number of workers and officials, which used to be very crowded, is now gradually thinning out, the biggest fear is that many people stay to receive salaries but are not capable of shouldering public work.

Everyone knows that the salary in the state sector in our country is too low, but people think that the official salary is low, but it is also easy to earn additional income from many forms that are euphemistically called bonuses, perks, or "bluntly" called petty corruption in the work they do. The total official income plus unofficial income is at least enough for the needs of life. Enough to live on while the job is leisurely is too good. However, since the State has a strong policy against corruption, all unofficial income has been eliminated or greatly limited. Unable to live on official income, workers in various sectors choose to move to the private sector in the hope of higher income. This situation is revealed first in the education and health sectors, because these are the two sectors with the most labor. Other sectors will sooner or later follow the same general rule.

Discussing solutions

At this point, it is also worth discussing a few words about the solution.

Firstly, it is necessary to reform the State management apparatus to make it streamlined and compact, and regular expenditures from the State budget must generate official income commensurate with the labor expended.

Second, the State only holds public career jobs that the non-State sector cannot do, and must find ways to effectively socialize the public career sector.

Third, the recruitment of cadres, civil servants and public employees in the State sector must ensure the selection of people with suitable capacity, who want to work for the State sector, have high professional qualifications and good ethics, and are sufficiently compact in number to responsibly shoulder the work of the State.

Fourth, reform the salary regime in the State sector so that salaries are paid appropriately to pay for the quality of work completed.

Fifth, continue to control corruption in the public sector to ensure the State apparatus is truly clean.

The current shift from the public sector to the private sector will continue. This situation will gradually stop and stabilize when the above-mentioned innovative solutions are thoroughly implemented. We note that economists have proven that labor and wages are a key factor of the macro economy. So, if we want the macro economy to be stable, we must properly resolve the structure of labor and income in the economy.