Give people a chance to work, not free handouts

The government will have to prepare to assist people who are likely to be permanently laid off because of last year’s flood disaster, which crippled industrial estates in the central region. The Employment Department recently reported that 122 businesses have so far laid off 45,078 people since last year, as they have not yet been able to recover from the massive deluge, which halted their business operations. 

Ayutthaya topped the list of casualties, with 72 establishments laying off 25,919 – or 57.4 per cent – of the flood-affected workers, followed by Pathum Thani, where 35 establishments laid off 18,483 workers, and Chachoengsao, where two businesses laid off 509 workers.

The government therefore has to urgently implement measures to assist these workers in finding new jobs during this difficult period. Many of these workers are low skilled, and are likely to find it hard to find new employment.

Many of the affected workers are still living in the provinces. The government should thus concentrate its efforts on enabling them to find jobs in those same provinces instead of seeing them migrate to the big cities to find menial jobs.

More workers could be affected. The Office of the National Economic and Social Development Board (NESDB) reported that a total of about 164,500 employees of flood-affected enterprises are at risk of losing their jobs permanently this year, as 284 firms have still not reopened after last year’s inundation. These people are not yet officially unemployed. But their future is still uncertain pending the decisions of their companies.

Apart from the long-term financial and social consequences of the flood disaster, these low-skilled workers will face another challenge as a result of the government’s policy to raise the minimum wage nationwide. This policy has met with criticism from the private sector, and some industries may now take the decision to replace low-wage workers with machinery, because they will find it more difficult to cover the rising cost of labour.

The government plans to increase the minimum wage to Bt300 per day, starting in seven provinces. The rise in wages will certainly help to improve the well-being of many workers, and it may also help businesses to increase their efficiency. But it will almost certainly come at the expense of job security for thousands of other workers, as businesses choose to adopt new technology to boost capacity if their workers can easily be replaced by machinery.

At the same time, the global economic slowdown may force some industries to downsize. This is possible here in industries such as textiles and garments and electrical appliances, because Thailand no longer has a competitive edge over emerging neighbouring countries such as Vietnam.

The government and responsible agencies must help unskilled workers by providing retraining programmes to make them still relevant in the job market during these changing times. The government should help these workers by matching them with potential new employers, as there are many sectors that face a shortage of labour. These workers should also be trained in how to manage their finances for future security.

The NESDB has also reported that unemployment last year increased by 1.1 per cent, with the number of unemployed workers standing at about 200,000, or 0.7 per cent of the potential workforce. 

Although the overall unemployment figure in Thailand is better than that in many other countries, we still do not have a good welfare system that can provide comprehensive assistance to the unemployed, especially those who have relied on the minimum wage. 

The unemployment number should be monitored carefully. At the same time, the government should re-prioritise its policy objectives. Instead of aiming to inflate growth through potentially damaging populist policies, the government should focus on employment. The key issue is how to create jobs and enable workers to rise in their careers by providing skills training and opportunities.