Tuesday, January 28, 2020

Graduates hit by spike in jobless rate

Sep 04. 2017
Porametee Vimolsiri, the secretary general of the National Economic and Social Development Board (NESDB).
Porametee Vimolsiri, the secretary general of the National Economic and Social Development Board (NESDB).
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By WICHIT CHAITRONG
THE NATION

THE jobless rate among new graduates spiked in the second quarter of this year even as economic growth picked up speed, highlighting a challenge for policymakers as employers cry out for the multi-skilled workers needed to underpin a technology-driven transition in the economy.

Overall, the unemployment rate edged up to 1.2 per cent up from 1.1 per cent in the same period last year, with 470,000 people out of work, the secretary general of the National Economic and Social Development Board (NESDB), Porametee Vimolsiri, said yesterday.

The total labour productivity rate increased 3.3 per cent but real wages increased only 0.1 per cent.

 “The unemployment rate spiked 24.1 per cent among those who have never been employed before as it was the graduation season and a large influx of new graduates entered the labour market,” said Porametee.

Of the newcomers seeking entry to the job market, some 39 per cent of them held university degrees, the NESDB said.

Porametee said the increase in the unemployment rate for this bracket of job-seekers followed a pattern, with the second and quarters showing a rise in unemployment before their prospects improve as the fourth quarter approaches.

However, the NESDB noted that the unemployment rate for this group had been on an upward trend since 2013. The ranks of unemployed in this group stood at 140,000 in 2013, before rising to 180,000 in 2016, and reaching a high of 220,000 in the first half of this year.

The main factors behind the stubbornly high unemployment rates for young graduates were a mismatch between their qualifications and the needs of employers and that the labour market was still waiting for a full recovery in private investment, Porametee said.

The economy grew at surprisingly fast clip of 3.7 per cent in the second quarter, accelerating from a growth rate of 3.3 per cent in the first quarter.

The NESDB identified three main issues for the labour market that need close attention over the next six months.

Employment and income in the agricultural sector may be adversely affected by weakening farm product prices and the impact of the recent floods, it noted. Prices declined by an average of 4.2 per cent in May-June and will fall further in the third and fourth quarters of this year, amid falls in the prices of commodities such as rubber, maize and sugarcane.

However, price of rice is expected to rise, in line with a rise in global prices for the grain. While tropical storms that hit in August and are forecast for this month may damage some rice production, it said.

 Secondly, the NESDB said there is an urgent need to accelerate the skills development of Thai workers to ensure they have the competency required by the labour market and to improve labour productivity. A positive sign for new employment was an expansion in private investment expansion of 3.2 per cent in the second quarter after contractions in the previous three quarters. 

“However, worker utilisation and the employment of advanced technologies in companies' production and services may result in changes in the forms and needs of employment, such as shorter working contracts and rising demand for workers with multi-skills,” the NESDB said.

The solution may be a dual education system that combines apprenticeships in a company and education at a vocational school in one course.

Thirdly, monitoring is required on the effectiveness of enforcement of the amended labour protection law and related regulations that imposes severe punishment on those found employing child labour as part of a broader effort to tackle human trafficking. Moreover, the new law also requires employers to have a set of written of rules and regulations regarding jobs and employment on announcement boards located in workplaces.

 

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