Academics suggest the government implement relevant measures to curb the growing distress of workers suffering a drop in income as the cost of living rises, often forcing them to resort to loan sharks.
Thailand Development Research Institute (TDRI) adviser Veerathai Santiprabhob said the drop in earnings reflects a slowdown in macroeconomic activities as workers' overtime is cut and the recent manufacturing production index pointed to a decline in output. Domestic consumption has slowed since the middle of last year.
The rising cost of living is partly due to the government's policy to raise the daily minimum wage to 300 baht from 2013, he said.
The quality of life for workers is the worst in six years, as the economic slowdown and higher cost of living have resulted in inadequate income to cover higher expenses, leading many of them to rely on non-system loans.
The latest survey by the University of the Thai Chamber of Commerce (UTCC) involving 1,200 respondents with income below 15,000 baht per month from April 17-21 found that over 80% had insufficient income to cover expenses, while 93.7% said they faced increased debt.
A shortfall in labour income is a critical issue since it could aggravate social problems such as unemployment.
"Farmers who have not received their pledging payments might come to Bangkok in search of work, but they will be disappointed," said Mr Veerathai.
He said one solution is for the government to allow specialised financial institutions to provide higher loans to workers. The government should also integrate informal financial sources into the formal lending system.
The public sector can also provide more training programmes to enhance skills and reduce the labour shortage, said Mr Veerathai.
For instance, the government can introduce measures to increase agricultural productivity and examine marketing strategies to expand sales proportion. The government may want to look into expanding more job opportunities in rural areas as the cost of living in the city is high, he added.
Somchai Jitsuchon, a research director at TDRI, said it is not surprising workers have seen earnings dip as economic growth has been sluggish as household debt builds. Export growth was also weak to start the year, though it has picked up recently.
The National Statistical Office reports a drop in overtime, but the lower income is not a serious concern at the moment as the unemployment rate remains low. Using the annual budget to mitigate the problem might cause excessive public spending, he said.
There are existing public policies which address the issue, including the provision of free bus services as well as utilities such as electricity and water, said Mr Somchai.
He said the income situation could improve when the political impasse is resolved and the economy recovers.
Indicators suggest households are more cautious in their spending because of their mounting debt and general public awareness of the unsustainable nature of the government's populist policies, said Mr Somchai.
Yongyuth Chalamwong, TDRI research director of labour development, agreed the problem has been increasingly stressful since the rising cost of living has ballooned 3-4% over the past few years.
The first-time car buyer scheme has contributed to an increase in consumer debt, while falling rice prices have caused farmers’ purchasing power to drop substantially, he said.
Despite the economic downturn, consumers also bear responsibility for their overspending the past couple of years when the economy was healthier and the domestic political situation was not in crisis, said Mr Yongyuth.
The unemployment rate is expected to rise above 1% this year if GDP growth is below 2%, leaving some 400,000 to 500,000 people unemployed, he said.
Mr Yongyuth said tepid economic growth could also cause a rise in crime rates as former convicts would have difficulty finding employment during the slowdown. He urged the government to take better care of the unemployed, especially members of the Social Security Fund, improving labour skills through training programmes.
It should also impose stringent rules preventing increased product prices by opportunistic sellers during the slowdown, he added.