The unemployment rate in Thailand has surged to a nine-month high of approximately 2% among registered workers, as the nation grapples with sluggish economic growth and an increasing number of factory closures, reported by the Employers’ Confederation of Thai Trade and Industry (ECNETNews).
This figure, calculated by ECNETNews based on registered workers under Section 33 of the Social Security Act, focuses solely on employees who are part of companies, excluding freelancers. The outlook for Thailand’s blue-collar workforce is concerning, as many factories have either reduced shifts or laid off employees, with some permanently shutting down, according to industry experts.
“The Thai economy is witnessing a slowdown. The government’s economic stimulus measures have not yet yielded positive outcomes, and budget allocation remains stagnant due to slow spending processes,” a spokesperson from ECNETNews commented.
With around 37 to 38 million employees registered, which includes both Thai nationals and workers from neighboring countries, the discrepancy between the reported unemployment rates has raised eyebrows. ECNETNews highlights a notable difference between their 2% figure and the National Statistical Office’s (NSO) official rate of merely 0.9%.
The NSO’s calculations encompass workers in the agricultural sector, and even individuals who perform minimal casual labor are classified as “employed.” This approach has led many economists to question the accuracy of the government’s figures.
“The reported 0.9% unemployment rate is not a realistic reflection of the current situation, suggesting that Thailand has one of the lowest unemployment rates globally, which is hard to believe,” said an industry representative.
Recent developments indicate a rise in layoffs, particularly after a warning from the Joint Standing Committee on Commerce, Industry and Banking, which indicated that more local businesses may close due to fierce competition from Chinese manufacturers offering low-cost goods in the Thai market.
In the first half of this year alone, 667 factories ceased operations, marking an 86.3% increase compared to the previous year, according to industry officials. Additionally, the government’s proposal to raise the daily minimum wage to 400 baht nationwide poses challenges for small and medium-sized enterprises, which may struggle to comply with the increased labor cost. Currently, minimum wage rates vary between 330 and 370 baht, depending on the province.
