The unemployment rate in Thailand has reached a nine-month high of about 2% of registered workers, as the country struggles to deal with slow economic growth and more factory shutdowns, according to the Employers’ Confederation of Thai Trade and Industry (EconThai).
The group’s calculation is based on registered workers under Section 33 of the Social Security Act, which refers only to employees who had been working for companies. It does not include freelancers.
The outlook is bleak for blue-collar Thai workers as factories have reduced shifts or laid off workers, while some other plants have shut down permanently, said Tanit Sorat, the vice-chairman of EconThai.
“The Thai economy is slowing down. The government’s economic stimulus measures have still not helped the economy, while its budget has yet to support the local economy because of the slow process of budget spending,” he said on Friday.
Thailand has roughly 37-38 million employees registered with the government, including both Thai nationals and workers from neighbouring Myanmar, Laos and Cambodia.
According to EconThai, the unemployment rate of 2% is higher than the number provided by the National Statistical Office (NSO), which reports an unemployment rate of only 0.9%.
The NSO calculation includes workers from the agricultural sector, and anyone who performed even one hour of casual labour in a given week is deemed to have been “employed”. Economists pay little heed to the official government figures as a result.
“The 0.9% rate does not reflect realistic data, as it suggests Thailand has the third-lowest unemployment rate in the world, which seems improbable,” said Mr Tanit.
The number of laid-off workers has increased following a recent warning issued by the Joint Standing Committee on Commerce, Industry and Banking, which said more local companies are likely to close as they cannot compete with Chinese rivals that export low-cost products into the Thai market.
During the first half of this year, 667 factories were shuttered, a year-on-year increase of 86.3%, Kriengkrai Thiennukul, the chairman of the Federation of Thai Industries, said earlier.
The government’s plan to increase the daily minimum wage to 400 baht nationwide could also hamstring companies, especially small and medium-sized enterprises that cannot afford to pay the higher rate to their workers, said Mr Tanit.
The current minimum wage rates range from 330 to 370 baht, depending on the province.