Catch the signal of the Thai labor market The highest job loss in 11 years Young people do not have much work.
The COVID-19 economic crisis has had a serious impact on the labor market. This led to the mass loss of workers in the second quarter of 7.5 hundred thousand people, or 1.95% unemployment rate per total labor force. This is the highest rate in 11 years and has a record 2.5 million workers on pause.
The EIC expects the labor market to take a long time to return to normal. Given the slowdown in labor absorption by businesses and the inconsistency between skills and business needs (skill mismatch), it is likely that this round’s economic recovery may not lead to employment. Add much As a result, workers are more likely to have to switch to non-formal work such as employment or freelance work This will affect income levels and stability.
This delay in the recovery of the labor market will slow the recovery of household income. Affect the ability to repay debt And may also reduce the competitiveness of the country in the long run Government policies will play an important role in the economy, including short-term measures to sustain employment. And structural policies to allocate large amounts of labor to change industries (relocate) and develop labor skills to be productive (productivity) is high and in line with future business needs.
The Thai labor market was already weak before the crisis.
The number of employed persons and average hours worked has decreased over the past five years due to both the slowing economic growth rate Using technology to replace labor And leaving the labor force according to the trend towards aging society Reflect that income The overall performance of Thai people has not increased much. And as the COVID-19 crisis hit in the first half of 2020, the weakened labor market is increasingly under pressure. Recently, the labor market has shown some signs of recovery from the lower unemployment rate. But the overall situation is still considerably sluggish than in the past, reflected by the four signs of weakness
Weakness Signal 1: The unemployment rate in the social security system continues to rise.
– During the second quarter of 2020 when the Thai economy is at its lowest point and has widespread lockdowns Causing many economic activities to be disrupted The situation in the labor market was immediately severely affected. The total number of unemployed 7.5 hundred thousand people increased from the same period the previous year to almost double. This is an increase in the number of unemployed people in every industry. As a result, the overall unemployment rate rose to 2.0% of the total labor force from just 1.0% in the previous quarter. Considered the highest rate in 11 years
– The unemployment rate for August 2020 was slightly lower from its peak. And still at a high level The unemployment rate in August remained at 1.9% for the total labor force. From the number of unemployed people fell to 7.2 hundred thousand people, however, the unemployment rate in August. The unemployment rate is high compared to the historical average (2013-2019) of only about 1.0% of the total labor force. Reflecting that the labor market has not yet returned to normal
– Increased system unemployment versus lower overall unemployment may indicate that Unemployed workers are increasingly moving to informal workers, such as self-employed, self-employed or self-employed. Which may have lower income Receive less or no comprehensive benefits Including the opportunity to access labor skill development training that is less than the system workers.
Weak signal 2: The young workers (15-24) still have a high level of unemployment.
– high level of youth unemployment The number of unemployed workers among the young workers (aged 15-24 years) in Thailand has always been higher than that of other age groups, with the COVID-19 crisis becoming more serious. The unemployment rate for the young workers rose to 8.6% of the total young workforce in Q2 2020 and continued to 9.8% in July.
– Corresponds to what is happening overseas where the employment of young workers is more affected than other age-group workers, for example, in the US where the youth unemployment rate increased from 7.7% in February to 25.2. % In May This was higher than the overall unemployment rate of 13.3% in the same month.
– The unemployment rate for young workers will drop to 8.0% in August. But it is still considered quite high compared to the historical average. Thus, unemployment among young workers is still a major risk to the labor market. This is because most young workers have no work experience, and unemployment leads to a lack of skill-building and work experience build-up. In which jobs are as limited as during this economic crisis The lack of skills and experience of younger workers can be particularly disadvantageous in competing for jobs with older workers with more work experience, who may reduce their wages to get the job done quickly.
The third sign of weakness: the number of workers on pause is higher than in the past.
The number of furloughed workers reached 2.5 million during lockdowns, but still slightly higher than normal levels in Q2 2020, when the labor market was exposed. Heavy pressure from both the economic impact. Lockdown measures And interruption of production activities Causing many businesses to suspend their workers Plus, many freelancers are unable to go out to pursue a career.
The number of furloughed workers has risen to 2.5 million, with 82.4% of the majority saying they are not paid. Many businesses have resumed normal operations. As a result, the number of furloughed workers dropped to 7.5 and 4.4 hundred thousand in July and August, respectively.
– The number of furloughed workers in the last two months is still several times higher than the same period last year, at about 1-1.5 hundred thousand. Part of it is expected that this is due to the fact that many businesses are unable to resume their operations at their past potential. Therefore still unable to absorb all labor that has to be stopped during lockdown
– The increase in the number of furloughed workers is another concern of the Thai labor market, as some of them may eventually become unemployed if the business lacks liquidity and has to cut people or shut down the business.
Signal Weakness 4: Low Proportion, Level (underemployment) continues to increase
– The trend of a higher percentage of low-level work from the lockdown period continued in Q2, full-time jobs (35 to 50 hours per week) and overtime. (Work that takes more than 50 hours a week or more, or OT work) totaled a total decline of 4.8 million people, while the number of jobs at low levels. (Work done more than 0 to less than 35 hours per week) and the number of pauses increased by 4.1 million people compared to the same period last year.
– During the months of July-August, full-time and overtime jobs still decline While the low-level jobs continue to rise On average, full-time and overtime jobs decreased by approximately 2.1 million people compared to the same period last year. While low-level jobs rose to 1.9 million, this trend is another indicator of the deteriorating power of the private sector. Therefore unable to employ as much full-time and overtime as in the previous period It may also be a consequence of the out-of-the-system workforce who previously worked with higher hours. To freelance jobs that often have fewer hours worked This trend reflects that the income of labor tends to decline. And still not recovering
The future of the Thai labor market
The unemployment problem will remain high and recover quickly due to the accelerating trend of business closures from January 1 to August 28, 2020, with a number of businesses notifying the Department of Business Development. Total of about 1.4 thousand, an increase of 9.1% from the same period a year earlier. And although the lock-down measures have been loosened, business closures have increased at an accelerated rate. By during the months of June – July The closure grew at 29.2% YOY and in the first 28 days of August. However, it continues to increase at an accelerating rate of 34.5% YOY, which is expected to be the result of a lack of income of the enterprise while liquidity is insufficient. This shutdown will result in joblessness in that business. While the labor absorption (employment) of the business sector decreases in line with the economic conditions that contribute to the reduction of the opening of the business sector as well. Which during January 1 – August 28, 2020
In line with job postings on Jobsdb.com, during the past week (27 Sep. -3 Oct.), the average number of job postings was lower than that of the previous week. March 21-27) to -20.8%, lower in all industries and salary levels. This reflects the widespread stagnation of employment despite the lockdown measures being greatly eased. It is expected that in the next period, income of the business sector will continue to recover slowly, especially for businesses that rely on the income of foreign tourists who have to wait for clarity on vaccine development. And the relaxation of international travel restrictions As a result, the trend of opening-closing will remain sluggish and affect employment in the next phase.
The heavy loss of work is from industries that are most affected by the economy, such as the tourism sector. There may not be any industry that can absorb it back into the system as quickly as labor skills are inconsistent with the job requirements, known as a “skill mismatch” problem. Such conditions will result in many workers being forced to go outside. system There are many already in the Thai economy. (The proportion of informal workers in Thailand is more than half, or about 54.3% of the total labor force), which results in job security. Welfare and skill training opportunities are reduced. They are also more likely to be required to pursue a career that is less than their full potential (for example, in a job with Or work at a low level) or work in an industry that does not have high productivity Affecting income levels in the long term In addition, some discouraged workers may also decide to leave the workforce and become more dependent on family or government income.
The way to survive is to upgrade the skills of workers.
Structural policies to accommodate large-scale labor flows and improving long-term labor productivity are equally important. The labor market crisis has left many workers unemployed from highly affected industries such as tourism. Or the manufacturing sector such as motor vehicles That need to find work in other industries Which by the Thai labor market structure, workers often return to the agricultural But the disadvantage of moving labor back to agriculture is that both income and labor productivity are low and slow growing.
Labor mobility that will be beneficial To the competitiveness of the country is to go into high-value-added industries. But the problem is that those workers may not have the skill-mismatch readiness of the industry, so that even if the business sector has the hiring power, they cannot actually hire them. Skills (upskill and reskill) are therefore very important. Where skill development training may be arranged Along with measures to support businesses in employment or a new graduate student internship program in the future growing business such as the production of health products and services. Services for the elderly Business related to e-commerce Digital businesses, etc. The government may help pay for employment and have tax measures to incentives. Under the condition that labor skills are practiced and measured seriously Measures of this nature can help affected workers gain income. And also practice long-term skills It will also prepare the labor force for economic growth with new industries.
However, the EIC analysis estimates that the Thai labor market is still in a sluggish state. Maintaining the labor market is still essential to avoid scarring effect, with workers’ upskill and reskill enhancement necessary. To enhance the productivity of Thai workers in the long term This will make the Thai economy pass through this crisis very strong.
Cr. https://brandinside.asia/scb-eic-thai-labor-market-covid-19/
Cr. Photo by Daniel Reche from Pexels
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