Monday, June 13, 2011

Thailand must prepare for big changes in the labour markets

By Nophakhun Limsamarnphun
Published on June 11, 2011

The next government will have to lay down a more consistent policy on migrant workers in Thailand, while preparing Thai professionals for new job opportunities in other Asean countries.

On migrant workers, the registration policy has been on and off over the past 12 years. It will be re-instated again this month after being suspended.

Thailand has more than three million migrant workers, both documented and undocumented, but the government officially says the number is just two million, including about one million registered. Most come from Burma. A smaller number come from Laos and Cambodia.

In the past 12 years, Thailand has improved its education system and expanded its coverage. Coupled with a declining birth rate, the country has faced a growing shortage of low and unskilled workers, as more Thais have elected not to take up such jobs in agriculture, fisheries, and construction.

According to the Thailand Development Research Institute (TDRI), Thais lost an estimated 3.8 million unskilled and low-skilled jobs to migrant workers over the past 12 years.

These migrants have become a major source of cheap labour as their salaries are usually about one-third of Thais, based on the prevailing minimum wages. Workers from Burma get about Bt2,000 per month compared to about Bt6,000 for Thais.

As a result, businesses and industries have warned that the next government will have to be cautious in boosting the minimum wage, which currently averages Bt180 per day.

The Democrat Party has pledged to boost the minimum wage by 25 per cent in two years, bringing the Bangkok wage to about Bt250 per day from the present Bt217. Pheu Thai has said it will boost the Bangkok minimum wage to Bt300 per day.

Small and medium-sized enterprises (SMEs) say they will go out of business if wages are raised to these levels quickly.

The next government will also have to bear in mind that Thailand's overall productivity is negatively affected by a rising number of unskilled migrant workers. A TDRI study shows that productivity falls one percentage point when there is a one-percent increase in migrant workers' share of the total workforce. Given that there is no policy on training and educating migrants, competitiveness will be further eroded if the number of uneducated workers continues to rise.

On the plus side, migrant workers have helped boost Thailand's GDP by 1 per cent, up from about 0.5 per cent a decade ago.

The next government will also have to prepare for the Asean Economic Community in 2015, when there will be a freer flow of skilled labour within the 10-country regional grouping.

In the first stage, this will cover seven occupations: doctors, nurses, architects, engineers, auditors, accountants, and surveyors. Thais in these fields will have to have necessary linguistic skills to benefit from the AEC.

Proficiency in Thai and English may not be enough, as they should also learn at least one Asean language in order to work in neighbouring countries.

There will be both opportunities and threats, as the country may lose specialists to more developed neighbours such as Singapore or Malaysia due to higher salaries.

Thai and other regional governments also have to agree to an Asean qualification framework on these professions so that the same standards can be applied to Asean citizens.

Overall, Asean has 5.7 million migrant workers, with Malaysia and Thailand being net importers of unskilled labour. Indonesia and Burma are major sources of unskilled migrant workers, which are not yet covered by the AEC.

Overall, the next government will have to improve the management of undocumented migrant workers by ensuring registration and other policies are consistent, while taking steps to prepare Thais to tap overseas employment opportunities in the AEC.

Source: The Nation

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