Unemployment and household debt expected to soar in coming months

The Office of the National Economics and Social Development Board (NESDB) said yesterday that Thailand had 260,000 people out of work in the third quarter of this year and the flood had significantly affected workers’ quality of life.

The unemployment rate was expected to increase to 700,000-920,000 people, with household debts also rising.

NESDB deputy chief Suwannee Khamman said staff monitoring social developments in the third quarter found employment increased by 1.6 per cent from the same period last year, with construction employment up the most at 4.3 per cent. There were less out of work – the unemployment rate was 0.7 per cent of 262,440 persons – compared to 0.9 per cent in the same period last year. But the real value of income only rose slightly by 3 per cent while the inflation rate continued to increase. Wages (excluding welfare) increased by 7.2 per cent, while inflation rose to 4.1 per cent, she said.

The skilled labour shortage indicated a long-term trend that the economy, largely using labour, must shift to use intensive technology and more productive labour. So, vocational education needed to provide the people with necessary skills, while cooperation between the public and private sectors should help improve work skills and investment in research and development for production innovations.

The flood disaster had affected the labour market and workers’ quality of life, she said. In the short term unemployment was likely to rise to 1.8-2.3 per cent or 700,000-920,000 unemployed in the last quarter while workers’ overall income would drop by Bt157 million per day even though living costs were rising, she said.

The first half of the year saw household debts rise to Bt136,456 per home – an increase from Bt134,699 in 2009, she said. However the number of households in debt was down to 56.9 per cent from 60.9 per cent in 2009.

It was expected that, for the rest of the year, the household debt would rise while savings would drop due to lower incomes because of the flood disaster, whilst living costs had risen during and after the flood.

There were 121,788 flood-affected people with mental health issues from July 25-November 25 while Thai people’s happiness index dropped to 5.98 in October.

Suwannee said that overall crime had increased by 12.8 per cent with 81,457 cases, although thefts, at 12,894 cases, were down 16 per cent from the same period last year but 21.5 per cent up from the previous quarter. Instances of theft were expected to rise in the last quarter, as people had to flee their homes due to the flood crisis.

The government plans to help business operators via a Bt2,000-per worker assistance budget so firms can continue to hire workers and pay them at 75 per cent of their wage although many had to stop work due to the flood. She said 120,000 business operators had asked for such help – beyond the target of 100,000 cases – so officials would propose that Cabinet give such help to 200,000 cases.