Shield workers from shutdown slump

Shield workers from shutdown slump

A booth selling telephone sets and appliances at a city shopping mall. Owners of stalls like this face hardship as the city shuts down all shopping centres to contain the virus outbreak. Somchai Poomlard
A booth selling telephone sets and appliances at a city shopping mall. Owners of stalls like this face hardship as the city shuts down all shopping centres to contain the virus outbreak. Somchai Poomlard

As the number of confirmed Covid-19 cases in Thailand almost reached 600 on Sunday, the government is ramping up preventive measures, such as banning mass gatherings and social distancing. Over the weekend, Bangkok and several other provinces shut down public places and cut down services.

Despite the stringent measures, most white-collar office workers can still work from home. They will still get their full salaries and receive benefits from welfare schemes provided by their companies and the government. But for informal workers without a stable and regular income, staying home is not a possibility -- and many of them are still not covered by a social security scheme.

For these blue-collar workers who comprise a large chunk of the labour market -- about 55% of the labour force -- staying at home means zero income, no money to live their lives, support their family, and pay their debts. One vendor told me it is do-or-die -- she'd rather "work than to starve to death".

The coronavirus outbreak has revealed inequalities within Thailand's polarised labour market, in which half the labour force have weak welfare safety nets and are vulnerable to shocks. It shows the structural problem that needs to be addressed if the country wants to cope with the economic impact of the Covid-19 outbreak as well as other crises in the past and future.

The shutdown will deal a heavy blow to millions of informal workers in the coming weeks if the government fails to come up with substantial measures to help those worst-affected by the crisis.

It is estimated that nearly five million workers, formal and informal, will lose their jobs, with those in tourism, service and retail sectors being the hardest hit, if the outbreak continues much further.

A young friend of mine -- a hotel receptionist -- said she has been forced to work 15 days a month with half a month's salary. Another acquaintance who also works in the hospitality sector said she has been forced to quit her job.

Under Thai labour laws, employers must compensate employees in cases of abrupt dismissals. However, many of those who will be hardest-hit by the pandemic are "informal workers", meaning they were hired on a month-to-month basis without proper contracts and as such have little bargaining power.

It isn't unusual for businesses to cut costs by avoiding contributions to their workers' welfare, even within the formal sector. In such cases, their workers should also be considered informal workers -- they are employed but lack job security.

Many workers who can't accept such conditions often shift to other informal jobs -- motorcycle taxi riders, self-employed vendors and/or freelancers -- to give themselves some security. And many have said they are pleased with the extra freedom that comes with not having a boss. However, when a crisis like the Covid-19 outbreak hits, they are among the first ones to be affected.

According to a study by the Just Society Network, a research group monitoring equity and fairness in Thailand, around 19.2 million informal workers are not insured under any social security scheme. This means almost 20 million people can't get unemployment benefits from the government. Informal workers often come from poor backgrounds, with high levels of household debt which erode their capacity to cope with the added shock of the shutdown. Throughout the coronavirus pandemic, the government of Prime Minister Gen Prayut Chan-o-cha is always urging everyone to be patient, stay "in harmony" and help each other get through the crisis. But behind the facade of camaraderie, workers -- those who need help the most -- are being forgotten by the government.

Two weeks ago, Deputy Prime Minister Somkid Jatusripitak proposed a 30-billion-baht fund to support the stock market, which has slumped due to coronavirus-induced plunges in global equities.

His measure, to be tabled before cabinet this week, has been widely criticised for protecting the rich, while leaving those in need out in the cold.

Last week, almost three months after the start of the outbreak, Assistant Labour Minister Duangrit Benjathukul Chairungrueng announced the government would implement measures to help struggling workers who had been laid off by the virus response find new jobs. The state might also provide training and reskilling courses, he said.

Those measures are vague at best. Things will get worse as some business operators, struggling to maintain a balance, won't hesitate to sack workers because they aren't sure whether the government will give them a back-up.

The governments of Denmark and Sweden, for example, have put in place financial assistance measures for local companies to encourage them to keep hiring workers.

Subsidising companies in trouble can do wonders in countries with a large formal sector and strong social security schemes for its workers. But in Thailand, the government will need to roll out measures which fit our market realities, with consideration for our many informal workers.

Those measures should aim to reduce household burdens, and take the form of soft loans, and short-term suspension of debt repayments. For certain groups, direct cash handouts are unavoidable.

But for the long-term, increasing workers' resilience to external shocks is essential. That will require fixing the labour market by ensuring fair wages are paid, and extending social protections in the informal sector.

Paritta Wangkiat is a Bangkok Post columnist.

Paritta Wangkiat

Columnist

Paritta Wangkiat is a Bangkok Post columnist.

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