Thai labour vulnerable across all dimensions, needs skills to break free from traps

These include shortages in certain sectors while others remain oversupplied, a widening skills mismatch between qualifications and labour-market needs, an ageing workforce, low agricultural productivity, precarious job security, unfair wages, and weak labour rights protection.

As Krungthep Turakij marks its 38th anniversary, the publication is spotlighting these challenges under the theme “Out of the trap” ahead of the Thailand Economic Outlook 2026: Out of the Trap forum on October 9.

Employment growth in 2024 contracted by around 0.3%, while overall unemployment remained below 1%. However, youth unemployment has stayed persistently higher than pre-pandemic levels by about 1%, particularly among university graduates and young women aged 15–24.

Meanwhile, those who are employed continue to struggle with informal-economy work, stagnating real wages, and poor working conditions — all of which highlight the urgent need for adaptation and upskilling to overcome these structural traps.

Upgrading skills to match labour market demand

Makiko Matsumoto, Employment Specialist at the International Labour Organisation (ILO), has warned that Thailand’s labour market is facing increasingly complex challenges.

According to the World Bank’s Thailand Economic Monitor (July 2025), the Thai economy remains heavily reliant on exports and fiscal stimulus, while domestic consumption and investment show signs of stagnation. Growth in key sectors such as tourism and manufacturing continues to be hit by uncertainty.

At the same time, Thailand is undergoing long-term structural changes. Manufacturing’s share of GDP has steadily declined over the past decade, falling from around 30% in 2010 to 24% in 2024, according to World Development Indicators from the World Bank.

“Thai workers can only survive and overcome these challenges by addressing both the demand side of the labour market and the underlying reasons why some workers remain unemployed or engaged in work that lacks the qualities of decent employment,” Makiko said.

She stressed that the ILO prioritises tackling skill shortages and mismatches, warning that workers must continually upgrade their skills to align with labour market demand.

Investing in lifelong learning and digital skills

Makiko emphasised that beyond skill shortages, policymakers must also understand workers’ aspirations, career advancement opportunities, and the growing demand for flexible forms of work. These factors are crucial to ensuring that Thailand’s workforce can adapt effectively.

She underlined the importance of investing in a lifelong learning framework, with a strong focus on digital knowledge and skills to keep pace with emerging technologies increasingly demanded by the labour market.

In addition to technical skills, soft skills such as communication, critical thinking, and language proficiency are becoming essential. 

Makiko noted that these proposals must be backed by robust data-driven analysis—both quantitative and qualitative—and reinforced through social dialogue among stakeholders, including employers’ and workers’ organisations.

Technology traps reshape Thai labour market

Makiko explained that the speed and direction of labour-market adjustment will depend on the scale of investment in technologies that reshape employment. While such technologies can raise productivity, incomes, and job creation, they also carry risks of displacement and job polarisation.

Thailand’s shift into an ageing society compounds these challenges. Employers may need to hire older workers who still have capacity, while also investing in reskilling so they can apply new technologies that boost productivity. This will likely require greater investment in automation, artificial intelligence (AI), machine learning (ML), and care technologies to support a growing dependent population.

The industrial sector, particularly manufacturing and tourism, must also adjust, as both face stagnation and uncertainty. Makiko highlighted that this underlines the need for structural adaptation.

At the same time, emerging sectors such as agriculture, digital economy, green economy, and care economy hold potential for productivity gains and the creation of more valuable jobs.

Tackling poverty and reskilling key to boosting opportunities

Makiko noted that compared with other ASEAN members, Thailand has performed relatively well in terms of labour force participation, as reflected in indicators such as low unemployment rates and reduced numbers of youth not in education, employment, or training (NEET).

However, the slowdown in job growth in 2024 may point to shrinking employment opportunities rather than workers’ capacity to remain employed.

She warned that skills mismatches and shortages remain a significant trap for Thailand. Workers who lack training opportunities due to poverty, insufficient household income, or social barriers—including limited access to education for women and people with disabilities—risk being excluded from decent work.

“Hence, measures to eradicate poverty must go hand in hand with policies to reskill and upskill the workforce,” Makiko concluded.