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4 May 2006

Thai Economy

Casual Laborers: Low Quality of Life

คะแนนเฉลี่ย

In the first quarter of 2006, Thailand's economy was plagued by numerous risk factors. Among them were the dissolution of Parliament, prompted by the political crisis, spiraling oil prices, the Baht that reached record highs against the US Dollar, not to mention the surging inflation rate. In Q1/2006, the inflation rate rose to 5.7 percent, compared to the 2.8 percent in the same period of last year. In April, the inflation rate soared as high as 6.0 percent.

Amid spates of economic risk factors, a number of businesses have fine-tuned their management strategies to retain their competitiveness. Lay-offs are among their tactics, which will undoubtedly cause problems for laborers.

In fact, a large number of Thai laborers are classified into the "informal sector" of employment, i.e., 'casual laborers', who are deprived of health insurance coverage and other social welfare benefits that could otherwise provide them some security. As a result, their quality of life and job efficiency are relatively low. This is regarded as a pressing issue that needs to be tackled by the government. In so doing, Thai casual laborers - a key driving force for the economy ? can live their lives more satisfactorily.

The Thai economy in 2006 is likely to see a slowdown, hampered by spikes in oil prices, rising interest rates coupled with slowing investment and consumption that will lead to reduced employment and a rising unemployment rate. KASIKORN RESEARCH CENTER (KResearch) expects that the unemployment rate in 2006 may stand at 2.0 percent against the rate of 1.8 percent last year.

It is noteworthy that the most workers in Thailand are categorized in the informal sector and are thus not covered by any social welfare benefits like those provided to the "formal sector". Under these circumstances, if the unemployment rate gets higher, casual workers will be severely affected.

Therefore to help casual laborers accounting for 62 percent of all Thai laborers achieve a better quality of life and improved work guarantees, thus solving some social problems that occur with 'informal laborers' and enhancing higher efficiency on the job, KResearch would like to propose some problem solving guidelines as follows:
  1. Arrange inclusion in the social security program for casual laborers.
  2. Introduce on-the-job safety measures for them.
  3. Encourage them to form associations.
  4. Set up a provident fund for them.
  5. Establish development centers where they can learn new skills.

Meanwhile, the premium that informal laborers would have to contribute to Social Security Fund or provident funds must not be too high. The government should set aside a part of its budget as a "Seed Fund" to help pay contribution to a newly set up fund. It is expected that this new fund would be able to support itself like the Social Security Fund, whose capital is an enormous amount, at present.

While formal workers celebrated the National Labor Day happily, the informal laborers are still struggling to help themselves. Therefore, in order to help informal laborers, which are also employees like any other, to have self-respect and a better quality of life, allow informal laborers to have membership in the Social Security system, which would be a good way to enable Thai workers to work better and have sustainable security in their lives.

Thai Economy

Labor