Vietnam has in place an extremely progressive national labor law which is designed to regulate working conditions. The major challenge is to ensure that the labor law is being properly and appropriately implemented. The high visibility of Nike, Inc., which decided to add Vietnam as an important site to source its production of footwear and apparel, generated considerable controversy in the United States, especially among activist labor rights groups such as the Workers' Rights Consortium. Accusations of sweatshop conditions and negligible pay were made by a number of journalists.
Actually, Nike's dynamic and creative marketing strategy has enabled the company to expand its production to a country that desperately needs expanded job opportunities. Unfortunately, the subcontractors (Korean and Taiwanese) producing for Nike in Vietnam were without question guilty in some instances of certain abuses and violated Vietnam's labor law. Managers found guilty of such abuses were deported. Though salaries in the Vietnamese garment, textile, and footwear factories are extremely low by U.S. standards, this additional income is often pooled in an extended family context and contributes importantly to families' economic welfare. With companies such as Nike active in Vietnam, in 1998 Vietnam was able to export US$1.4 billion worth of footwear overseas.
Those unable to find formal employment in the Vietnamese economy must seek income-generating activities in the informal economy. Conditions in the informal economy vary rather dramatically, depending on the activity involved. Some informal sector jobs provide individuals with far more freedom and independence than if they were working in a formal factory setting. In other instances, work in the informal economy can be rather humiliating, such as those involved in "begging" tourists to buy their souvenirs, for example. Unfortunately, an illegal commercial sex industry has emerged in Vietnam, especially in the Ho Chi Minh City area. Undereducated, unemployed women can be vulnerable to such an industry. Primarily as the result of the growth of this industry, it is estimated that approximately 100,000 Vietnamese have HIV/AIDS.