Shift focus to economy

Shift focus to economy

Against the backdrop of a deteriorating economy, Thailand has over the past four months seen a series of mass layoffs along with closures of businesses. With industry experts and observers predicting a higher unemployment rate for next year, the worst is probably yet to come. But the government does not seem to be prepared for it.

Since July, many manufacturers in key sectors, such as electronics and automotive, have either laid off hundreds of their workers or put them on temporary leave after suffering a decline in orders from customers overseas. Many have even been forced to shut down.

According to the Employers' Confederation of Thailand, the ongoing slowdown in employment has recently been felt in sectors such as exports, manufacturing, logistics, services, wholesale and retail. And the trend will increase among companies located in industrial estates in key provinces such as Samut Prakarn, Chon Buri and Rayong.

The bad omens came in the first half of this year during which about 436,000 people were officially recorded as jobless. This figure excluded those working in the informal sector. During the same period, 6,667 businesses closed -- a 6% rise compared with the same period last year.

The Employers' Confederation pointed out that the Sino-US trade war has played a major part in this crisis. Additionally, companies' growing fondness for adopting new technologies, such as artificial intelligence and automation, has also been a key factor that has caused, and will cause further reductions in the workforce.

While many workers will be at risk of losing their jobs next year, the situation will be worse for about 520,000 students who will graduate this April, as it is expected that many businesses will implement freezes on new hires. Some companies, which have faced a collapse in orders, have opted to temporarily keep their employees on a 75% payroll, as required by law, despite not having work for them.

Additionally, outsourced personnel or services will likely be terminated by many businesses, and overtime payments will become a thing of the past. Many companies are expected to close down certain production lines or branches as well as offering early retirement packages for existing staff.

During this time of crisis, economists and the opposition have urged the government to trigger more investment and create more jobs. Disappointingly, the Prayut Chan-o-cha administration's 3.2-trillion-baht budget bill for the 2020 fiscal year shows that these areas have not been given a high priority.

Instead, the government has prioritised spending on unnecessary items such as procurement of military hardware and weapons. In the past months, its response to the economic downturn has been fiercely criticised for being misguided. It has injected large amounts of money in cash handouts and subsidy measures which may trigger short-term consumer spending but will unlikely create jobs or bring about investment.

As the 2020 budget bill is still to be subjected to further and final readings early next year, the government must ensure that it will spend more on schemes that promote investment and generate jobs. As workers without professional or technical skills will be more vulnerable to job cuts, there must be skills training provided for them.

Withstanding the impact of the economic downturn must already be hard for many workers at the bottom end of the economy. Unemployment will only make things worse for them and their families.

Editorial

Bangkok Post editorial column

These editorials represent Bangkok Post thoughts about current issues and situations.

Email : ploenpotea@bangkokpost.co.th


Do you like the content of this article?
COMMENT (18)

Heavy rain continues until Tuesday

Heavy rain will continue until Tuesday after it caused runoff and floods in several provinces from Wednesday night, according to the weatherman.

14:32

More charges

The digital minister moves to prosecute three major social media service providers for failing to remove anti-monarchial messages they were were warned about, and the student protesters who posted them.

13:40

Airports deploy rapid virus tests, sniffer dogs to unlock travel

LONDON: A handful of European airports are implementing trials of quick-fire coronavirus tests, working with airlines to push technologies still being developed as a way to revive stunted international air travel.

12:41