Thailand’s employment prospects are negative as there are clearer signs of a shrinking workforce, evidenced by fewer insured workers under Section 33 of the Social Security Act, which covers more than 10 million people, according to the Federation of Thai SMEs.
Sangchai Theerakulvanich, the federation’s president, said another pessimistic sign for employment is business closures.
Financial reports for fiscal 2024 indicate some businesses are struggling to survive. Signs of distress include companies continuously reporting negative financial results to the Revenue Department, or submitting blank financial statements, which suggests no business activity in the past year.
The job market is extremely challenging for Thailand’s new college graduates and even worse for foreigner’s thinking about moving to Thailand and looking for work.
One of the issues of moving to a foreign country is that nothing is guaranteed and things can change from year to year.
When you depend on an income, like most Thai’s have to, economics and other worldly factors can change the financial landscape over night.
He said the economic downturn has affected both businesses and employment in the country, as production costs rise.
“Thailand’s economy was in a poor condition even before the pandemic. Small and medium-sized enterprises did not just start struggling — they faced hardships for 5-6 years before the pandemic,” said Mr Sangchai.
“The pandemic merely accelerated their downturn. Then when the economy began to recover in 2022, the Russia-Ukraine war broke out and Chinese investors employed Chinese labour instead of hiring locally.”
He said a crucial task for the government is to reform the education system to support future industries that rely on artificial intelligence (AI), digital technology and language skills.
In addition to English, workers should acquire proficiency in a third language, said Mr. Sangchai.
According to Mr. Sangchai, the key issue is not the minimum wage, but rather the quality of the workforce and its ability to enhance productivity for businesses.
“If the daily minimum wage is raised to 400 baht now, a significant number of people could lose their jobs. The manufacturing sector, in particular, is unlikely to be able to sustain a 400-baht minimum wage,” he said.
“If workers do not improve their productivity, they will ultimately be replaced by machines and AI.”
According to a recent report from the National Economic and Social Development Council (NESDC), preparing the necessary skills for the workforce to support new industries is crucial.
Data from the Board of Investment on foreign direct investment indicated most of the increased investment is in new industries, some of which are vital to restructuring Thailand’s economy.
These investments include large data centers, semiconductor assembly and testing, electronic circuit board manufacturing, smart electronic device production, high-precision machinery manufacturing, and renewable energy power generation.
These industries are expected to create around 170,000 jobs for Thai workers.
However, the report noted the 2023 IMD Digital Competitiveness Ranking highlights weaknesses in the Thai workforce, which remains heavily reliant on foreign high-skilled labor.
To ensure Thai workers benefit from these investments, as well as from future investments in high-value industries that utilize advanced technologies, relevant sectors must enhance Thai workers’ skills, particularly in science, technology, engineering and mathematics, where there are limitations both in quantity and quality, according to the NESDC.
The state planning unit also raised concerns about US President Donald Trump’s protectionist trade measures leading to increased unemployment in Thailand.
Danucha Pichayanan, secretary-general of the NESDC, said the implementation of US trade measures, both tariff and non-tariff, could affect exports and employment in Thailand.
In addition, Thailand faces concerns over human trafficking, as it has remained at Tier 2 in the US Trafficking in Persons Report since 2022.
“The US has not yet introduced measures specifically targeting Thailand,” he said.
“Many of Thailand’s exports to the US include computers and electronics, so we must wait and see whether specific measures are imposed. The government needs to prepare appropriate responses, including negotiations with the US, to mitigate any potential impacts.”
According to the NESDC, Thailand’s unemployment in 2024 rose slightly from the year before, tallying 1% of the total workforce or 402,200 individuals, up from 0.98% or 395,200 in 2023.
The total workforce last year totaled 40.35 million, down by 0.2% from 40.44 million in 2023.
The total number of employed people was 39.8 million, a dip of 0.3% from 39.9 million in 2023.
For the fourth quarter of 2024, the total number of employed individuals was 40.1 million, a decline of 0.4% year-on-year, attributed to a continued contraction in agricultural employment, which fell by 3.6%.
Source: Bangkok Post