Thailand Social Monitor, July 2000

Thai Workers and the Crisis July 2000   Download report (800kb pdf)

Preface

Thai workers have been at the front lines of Thailand’s economic crisis since the onset in July
1997. They have lost jobs, wages, and hours worked. They have migrated to find work, changed occupations for better opportunities, left the labor force to go back to school or work at home, and remained in low wage jobs in the agriculture sector to survive. Thai workers have adapted in many ways to the economic downturn, and in doing so, they have demonstrated the Thai way of dealing with adversity. They have worked harder, they have shared jobs and resources with each other, they have striven for new opportunities.

We, the authors of this fourth Thailand Social Monitor, are impressed with the resilience and
fortitude of Thai workers. These qualities have helped Thailand’s labor force endure the crisis
with less severe results than for other Asian countries, as will be seen in Chapter 2. The Thai
labor market has been more flexible and has therefore spread the effects of the crisis more
broadly through reduced wages and hours worked, while protecting many workers from open unemployment and destitution. This is an admirable and socially protective outcome. Thai workers and many employers have cooperated to cushion the effects of the crisis.

However, we are concerned by the persistence of these impacts and their maldistribution to the poorest segments of the labor force. As shown in Chapter 2, the social crisis is not yet over, as social recovery lags behind the pace of economic recovery. This is not surprising for a country emerging from such a steep decline in GDP, but no one should be complacent when average wages have endured a sustained decline continuing into the first quarter of 2000; when total wages and underemployment are just slightly better, with the first small improvements recorded earlier this year; and with the unemployment rate, although declining, still well above pre-crisis levels. We believe that marked improvement in overall wage and employment conditions in the labor force, what we term social recovery, will be a prolonged process.

The inequitable distribution of crisis impacts is worrying, but is also not surprising. The young, less educated, less skilled and low wage employees are typically at higher risk of job and wage loss in any labor market downturn. This has been the case in Thailand, as all the employment and wage indicators show higher impacts on low wage employees. It is only in Bangkok that these patterns have not prevailed, as the better off, higher salaried workers remain unemployed along with newly educated university and secondary school students.

This Social Monitor also analyzes the performance of Government social protection policies and programs, including employment generation, the minimum wage, severance pay, union activity and social security. Employment generation programs financed by the Government seem to have exerted a measurable impact on reducing unemployment, but as expected, the social protection instruments tend to be very limited in their coverage and benefit the better off, higher wage employees, leaving the poorest workers less protected.

While there is much to commend in the way that Thailand’s labor force has survived this crisis, and the Government deserves credit for an effective response in generating new jobs, there are clear signposts for the future. Coverage of social protection programs need to be expanded; targeting of social protection programs and policies to the vulnerable can be improved; wage flexibility, work sharing and other cushions against adversity should be sustained and supported as Thailand’s distinctive approach to self reliant social protection.

We commend the work of a dedicated team of researchers and analysts who helped prepare this Social Monitor, including Dr. Rosarin Gray of the National Statistical Office, Chris Chamberlin and Maryam Salim of the World Bank Office Bangkok, Dr. Piyasiri Wickramasekara of the ILO Office in Bangkok, and the lead consultant, Dr. Anil Deolalikar. We acknowledge with thanks the contribution of earlier studies from the NESDB’s Development Evaluation Division, TDRI, UNDP and the ILO. We particularly wish to recognize the advice and guidance from a large number of Government and civil society reviewers who helped improve the analysis on many points, and in particular the Department of Employment from the Ministry of Labor and Social Welfare. Support from the Asia-Europe Meeting Trust Fund is gratefully acknowledged.