Vietnam is in its workforce golden age

Also what the labor force in Vietnam has to do with the economy here, from American public media. This is Marketplace. In Los Angeles, I'm Kyle Rizdollard. It is Tuesday today. This one is the 14th of April.

Good is always to have you along everybody.

Another story from our series, the Age of Work, coming up later on in the program. But we are going to start today with the economic reality of our geopolitics. It comes in the form of the Prusa Price Index prices at the wholesale level, which we learned this morning from the Bureau of Labor Statistics, rose 5-10th of 1% month to month. That is the headline number. The core rate, which takes out food and energy prices because they bounce around a lot, that was basically flat.

And that's going to make more sense when I tell you that gas prices were up 14% in March. The whole sale again on pump prices. And diesel was up more than 40% for 0%.

“Now, me mentioning diesel, should you get you thinking about what diesel is used for?”

And if you said trucks will go straight to the head of the class.

Marketplace is just in hose on trucks transportation and what the price of diesel is going to cost consumers for us today. Over the last few weeks, Catherine Reynolds, who handles imports for Palmetto tile distributors in South Carolina, has been getting a lot of emails about fuel surcharges from shipping companies. So, whatever the growth bill is, they'll add 15-25% to that. Reynolds says she's been through this before when the energy prices spike after Russia invaded Ukraine.

But Zach Rogers, a professor at Colorado State University, says back then, companies were holding on to excess inventory. They built up during the pandemic. And that helped them to rely less on transportation. This year, we've been running inventory very lean. And so even if transportation is very expensive, there will really still have to be some replenishment.

“Companies could build up their inventory again to avoid having the constantly replenish items.”

But Rogers says doing so comes with its own costs. Since companies still have to pay tariffs on imported goods. And so, a lot of companies are finding themselves between a rock and a heart place because of these counteracting pressures. Of tariffs and surging fuel costs. Many companies are doing what they can to mitigate those fuel costs.

Can get it as CEO of Rothmans, a man's clothing store in New York. He says he's also been getting hit with surcharges, even for local shipments. So, you know, we started investigating alternatives. And last week, we rented a truck and drove it out to the warehouse in New Jersey and picked up 22 boxes. Meanwhile, Catherine Reynolds at Palmetto Child Distributors says she's trying to consolidate her shipments.

For instance, today, she's waiting to place an order, while she has two other orders on hold. Just because I want the three to ship together, if possible, to save everybody money on the back end. Still, Reynolds says she'll have to pass at least some of the costs on to our customers. I had a staff meeting this morning and just had to discuss that and tell them, "Keep your eye peeled for this. We do need to build that into our cost to our client."

Because the business she says can't afford to absorb the cost. I'm just in hell for Marketplace. What if there was a war? And six weeks into it, Wall Street and the person, if you will, of the three major indices, said, "You know what? Let's just call it a wash."

Because that's where we find ourselves today, equities basically back to where they were before the bombing started.

We will have the details when we do the numbers. [Music] The macroeconomic phrase, "Oh, the day today was delivered by the International Energy Agency," which in a report this morning, said it's worried about a falling global demand for oil. The supply challenges we know about the straight of her moves being closed and all.

But the IA says demand destruction is becoming a problem too. We have called Katherine Rempel to get some context on this. She's here every Friday, or Fridays every now and then, I suppose. She's on MS now, and the bowlwork on the regular Katherine, welcome on a not Friday. Glad to be here. Is it up?

“Do me a favor and 30 seconds demand destruction, what is it?”

It's kind of a funny concept.

offends him.

“Because demand is the relationship that tells you how many barrels people are willing to buy at anything.”

And the idea here is that maybe a lot of people will need less oil.

We'll purchase less oil because prices have gone up. And look, if there were some magic new technology that made cars go twice as fast per gallon, I guess that would be demand destruction. What we're really talking about here is people buying less because of higher prices to be nerdy about it. You're on a different point of the demand curve.

But in this case, it's like prices got so expensive that, in fact, people are going to the extent possible purchase less oil.

Okay, why is the IEA worried about it?

“They are worried about it because first of all, there may be a switch in terms of what people's buying habits are going forward.”

It may lead to potentially a slowdown in the U.S. economy. Again, to the extent that it is possible, or U.S. economy globally, to the extent that it is possible to purchase less oil that probably means fewer people are going to work. Less stuff is getting manufactured that there are big macroeconomic consequences, essentially, of a big decrease in oil consumption and oil demand.

In an analogous way, I guess I would say, to what happened during COVID, when you saw a huge destruction of demand, in that case, because of COVID, not because of high prices.

And that led that was indicative of, and in fact, contributed to a big slowdown economically around the world. So let's take that slowdown possibly around the world and in the United States and channel your energy appell, or maybe Kevin Worship, this thing goes on long enough. And tell me what the Federal Reserve's, tell me about the rock in the hard place that the Federal Reserve will now find itself in.

“Well, I think the issue for the Fed is that prices are rising, normally that implies that interest rates should go up, right?”

That at the point of interest rates going up is to curb demand, like there's less money sloshing around in the economy, so it's people are less able to buy things. But in this case, you might see prices go up and lower output down stream, right? Because people are not buying the oil needed to manufacture stuff in transport goods and go to work, et cetera. And so if you have this serious risk of rising prices and falling output, we kind of supply shock ourselves into stagnation, which is the hardest problem for the Fed to solve.

One part of the stagflation problem, the flation thing, the inflation piece would imply that the Fed should raise interest rates. The other part of stagflation, the stag stagnation piece of things would suggest that they should cut interest rates. And either way, whatever they do to solve one problem, we'll make the other problem worse. And all of this really depends on how long things drag on with the war, with the supply chain disruptions, and how expectations react, and we don't know really any of that yet.

Right, that's a whole series of unknown unknowns. Last thing, and I'm going to venture into the political side of this grand thing we call the political economy, where you was surprised as I was to hear Secretary Basin today. The Secretary, the Treasury say, you know what, maybe the Fed should just wait and see what happens. I wish I were surprised. I wish I were surprised. Well, I wish I were surprised that somebody from the administration were weighing in at all on monetary policy. I guess that's where my starting point is. In a different administration, I would have been surprised that the Treasury Secretary would say anything about interest rates.

So that's like, you know, the thing that we've become in your two that we should be shocked by, but we're not. In the second piece of this is, yeah, it is a little bit unexpected, I guess, that if they are going to weigh in on interest rates, which they should not, that the way that they weigh in is by saying, do nothing or they best end to this case. Yes. As opposed to just cut rates as far as you can, which is what we've been hearing from Donald Trump, but also pretty much ever, everyone else in the administration.

So, they are all pointing in one direction, Basant, I guess, maybe pushing back a little bit on that, and we'll see where things go. I love the implied question mark on the end of that sentence. Catherine Bell, you can get her MS now, you can get her on the bullworks. Well, Catherine, thank you. Thanks, Guy. I was in Vietnam a couple of three weeks ago for our series, The Age of Work, how changing demographics are changing the way the global economy works.

But I'm going to start with one that really shaped our understanding of the economy over there.

I'm Henry, I'm Henry Pham, Pham Pham Pham, I see you at Donigaman Company and he met them. And what do you make here? We bake galen. Henry Pham runs a garment factory about 11 miles from downtown Ho Chi Minh City. He makes uniforms, t-shirts, hats, dresses, you might buy from a big US retailer.

He is a little bit hot, we move to up there.

“Is it cooler over there because it's really hot right here?”

I don't know. My phone said it was 95 degrees, so yeah, hot. We moved eventually into a room where a dozen or so workers were ironing clothes and packing them up for shipping and keep point here where it was air condition. This is better, this is better. It's not as hot.

Last year, we feel that it's hot here.

So we decided to make air condition for authority. It's expensive though. But worth it for you for a bit. I need to do it because it's good for worker and however it's expensive and the money we spent for electric for every month. Hi.

Henry's plan was to air condition the whole factory and we finished here and everything okay. And meet the term. Say that all products under 100 USD is free tech. Yes, this part of the story is about tariffs. Sorry.

Henry didn't pick that $800 figure out a thin air. Last August, President Trump decided he was going to impose tariffs on previously exempt shipments worth less than $800. And after I think it's at no. No and auto. So you can't do air conditioning on the other part of the factory.

But that's a really interesting. So you said you're worried about the United States. And that $800 thing that diminishes the word we use. That's a big deal for you right here in this factory. It's a big deal. Yeah, just only a small site in U.S.

And a lot of worker in my factory don't have air conditioning. Think about that. A guy who runs a garment factory in Ho Chi Minh City that sends clothes all over the world is trying to grow. And treat his workers better in the process. But a policy change half a world away means he can't afford to air conditioning's factory on a 95 degree day.

But for business owners like Henry Fan and others you're going to hear from. Being in Vietnam comes with a whole lot of advantages.

This is the most amazing marketplace that I've ever seen in my entire life.

Earlier that day, before we went out to Henry Fan's factory, Nila and I had taken a little side trip. We should say it's huge, right? And we're going to go inside a minute. It's blocks and blocks of commerce. Right. This is the Bintai Market, right?

Yes. Say it right for me. Bintai Market. Bintai Market. Yeah, Bintai Market.

That's Andy. She's our translator and our fixer. Obviously we paid her for her services.

“Also, you should know that the Ministry of Foreign Affairs since someone had tagged along to keep an eye on us.”

And on everyone we were talking to, a free press is still not a thing in the socialist Republic of Vietnam. Even though its economy has really opened up in the past 30 years. There's a lot going on here. People delivering all kinds of stuff on mopeds and scooters. So many mopeds and scooters and street vendors everywhere competing for your attention.

This whole series has been about primage working population. Right? We've done Cumberland County, Tennessee. We've done Utah County, Utah. We went to the UK, which is a little bit ahead of us.

What has brought us here, a labor economist that you are? We're seeing a country at its peak. If this was tennis, Vietnam would be the sweet spot. This is a country where there are two working age adults for every dependent. Either over 65 or under 15.

Okay. Explain why that matters. Because in every other advanced wealthy country, that golden spot led to the wealth creation. It led to economic growth. It led to technological advancement.

In fact, you can't get there without having the kind of sweet spot that we're seeing in Vietnam right now.

“Okay, so that's what the United States and Western Europe and developed economies had 30 years ago.”

That's what's been driving us for 30, 40, 50 years.

This is what's coming for this country.

“Well, this is the present I would argue.”

Okay. Because right now, this is the moment. This is the moment to take advantage of a working age population, an advancement in technology that is coming and skill up a workforce to drive the economy into the future. However, it's not going to last forever.

This moment for Vietnam is a moment for American companies, too, of both opportunity and challenge.

Leave the way, Andy, rough. There was amazing booths inside the market, literally overflowing with goods.

I'm going to guess that's not a real babu backpack, I'm just saying. It's not real, not face. Not real North Face, that's right. Stalls, selling wallets and shoes, lotions from Korea and Japan, all kinds of food, too. How many varieties of mushrooms are there?

There are a lot. A lot of varieties. And then we turn to corner. There are a lot of mushrooms. So, they are a pair of husband and wife.

So, this is Mr. Yong. Hello. Let's see you. And Ms. Vong, his wife.

Ms. Vong and Mr. Yong, they're married.

They sell fabric from all over the world that is 10 by 10 foot booths to both wholesale buyers and retail. So, the exact year is 38 years in this industry, selling textile. And then he started with just textile like this, fabric, just like draw material. And we should say we have both after both after both of fabric. Yes.

And then just like recently, three years in the past three years, he started selling scarf. Scar. This is the new product, I guess. All right. Okay. Although it's hot here, I don't know if you're new to Scar, right?

Ask him how business is. (speaking in foreign language) So, he was saying business is slowed down, but he says a lot because of the technology could change. People don't have to be in here to buy the product anymore.

“And then he also tried to diversify to, that's why he started selling scarf.”

Yes. It's for tourists as well. Do you think that your children would take over your business here? (speaking in foreign language) They're children.

They are what color workers. They have office job. And she was describing this work is so much harder. She started at seven in the morning and then she only finished around like six. This work, she worked every day of the week.

Meanwhile, her children, they get more times off and then they don't have to work. They don't have to be cruel. A day at the market for her, she says, it's not stable like the office job. Vietnam's growing economy means more opportunities for primage workers, like the couple's children, who are able to get higher paying

and honestly easier office jobs. That's the demographic change we're talking about. A change that does mean more opportunities for American investment and a bigger role for the Vietnamese workforce in the global economy. (upbeat music)

We're going to go back to Henry Fam and his partially air condition factory

in a second, but first, let's do the numbers.

(upbeat music) Down now, she was picked up 317 points today, two thirds of 1% 48,535, and as deck jumped 455 points, almost 2% 23,639, the S&B 500 gained 81 points, one in 2/10%, 69, and 67.

Vietnam is the top apparel supplier to these United States over took China back in 2025. Nike makes about 50% of its footwear and 30% of its clothes in Vietnam, raised forward 3% crox. Also makes about half of its iconic channels

in that Southeast Asian country. Iconic ironic take your pick out, and now crox stepped up 1% don't at me. Gap dropped 1.5% today. Urban Outfitters, parent company of anthropology,

lost 2 and 3/10% target. Up 1 and 4/10% of 1%. The electric car maker Rivians is going to be powering a factory in Illinois by reusing batteries from its own vehicles,

so it reports the Wall Street Journal. Rivian up to day 6/10% of 1% bonds up to yield on the 10 year 10 year 10 note down for an 1/4% or listening to marketplace.

“Have you ever heard of your own business with Shopify?”

And to be honest, with the checkout with the world-wide best converse, that's right. The checkout with the world-wide best converse. The legendary checkout from Shopify

is just looking for your website,

and on top of everything.

That's the music for your ears. Like you said, with Shopify, it can help you with a real help. Start your test today for one of your promontals. On Shopify.de, let's record it.

This is Marketplace, I'm Kai Rizdong. We're going to pick back up at Henry Fam's Garmin Factory in Ho Chi Minh City, Vietnam. You know, it's covered, but it's open air. It's a couple of thousand square feet.

Oh, here we go. Look at all these sewing machines. Yeah, okay. Oh, wow.

“Remember how I said it was really, really hot?”

This sewing room has nowhere conditioning.

Just fans, big and small, moving that 95 degree air around. There are 50 or so workers, each sitting at their own sewing machines. There were piles of tank tops and blouses,

and other partially finished pieces. So, how long have you been in business? I'm starting, I do this, made from 2,000 N9 when I 24 years old. And I started with 400 USB.

In that time, I worked for a company. And I don't want somebody at me to do, right, do, do, do, do that, yeah. You wanted to be your own boss. He went from $400 US to having more than 300 people working for him.

Average age of that workforce, by the way. 35 to 40, he said.

“When you hire people, do they already know how to sew and cut fabric?”

Or do you have to train them to sew? 80% is they have good skill or 70% and 70% they come here and we're taking for them. Training is workers installing AC. That's Henry Fam investing in his people.

Vietnam's prime age workforce is a competitive advantage for companies here. And because of that, Henry has been able to expand globally with clients in the Middle East, Asia, Africa and North America. Do you ever think about how you're, I mean, here you are in the suburbs of Saigon of Ho Chi Minh City,

but you're part of the global economy? Do you think about that? Did these clothes wind up in the United States and in Africa? Actually, when I was young, in hometown, far from here,

I never think that one day I can be a businessman.

I can't spot my own product to all over the world. Yeah, that makes me amazing. I cannot imagine. It's kind of amazing. You can't imagine. You said you export 90% of your product, right?

Yeah, okay. What's your biggest worry?

“What's the thing that makes you most worried for your business?”

The most worry is the policy policy policy policy. The most worry is the policy changing. And you say that right now, the policy can't change after two weeks. Henry's not saying anything you wouldn't hear from a small business in the United States. He pointed to a box of clothes, headed to Jordan, eventually.

The concept that we have to finish is other and seep to Jordan, let two weeks ago. However, that because we have no sea life to go to Jordan right now. So we have to keep it in my company right now. What's your question?

Once again, geopolitical instability. The question, really, or one of them anyway, is whether geopolitical instability will become a big enough disadvantage to how we the economic advantages Vietnam has right now. Because as Nila set up at the top, its window of opportunity is not going to last forever. (music)

Coming up tomorrow on this program, garage doors, American holidays, and Vietnamese factories. (music) This final note on the way out today, I'm not sure we needed the official validation, but sometimes it's just good to have what you think confirmed by people who actually study this stuff. The International Monetary Fund was out with its latest world economic outlook today.

Here's the money quote from the organization's chief economist. The global outlook has abruptly darkened following the outbreak of war in the Middle East. Pierre Olivier Gorneshaw wrote, "The war interrupted what had been a steady growth trajectory." And of quote right there, "Global growth is here slows from 3.3% to 3.1%. The caveat and it is a very big one is that that's the scenario if the bombing stops like,

now." Jordan Manji, the new Maharaj, Dana Winn, Olga Oxman, and Virginia K Smith are the digital theme. I'm Kyle Rizdahl, we will see you tomorrow, everybody. (music)

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