Migrant worker shortage threatens key Thai exports, economic recovery

[webfact]

FILE PHOTO: A Myanmar migrant worker passes his time near his room as he has been stuck for 12 days due to lockdown measures after more than a thousand COVID-19 cases were detected in the workers' dormitory in Bangkok, Thailand May 22, 2021. REUTERS/Soe Zeya Tun/File Photo

 

By Orathai Sriring and Satawasin Staporncharnchai

 

BANGKOK (Reuters) - Thailand's exports have been a rare bright spot in the struggling economy, but migrant worker shortages are threatening labour-intensive sectors, undermining a fragile recovery as the country struggles with its worst COVID-19 outbreak yet.

 

Even as global demand rebounds and this year's 9% drop in the baht makes Thai goods more attractive, a lack of migrant workers is threatening exports as the economy already faces a tourism slump and sluggish domestic consumption due to virus containment measures.

 

Key exporting industries such as food and rubber production can rely on migrant workers for as much as half of their workforce, according to company and industry officials. Exports accounted for 45% of Thailand's gross domestic product in 2020.

 

Thailand has about 3 million legal migrant workers, mostly from Myanmar, while there is demand for about 390,000 more, Labour Minister Suchart Chomklin told Reuters.

 

But strict enforcement of border controls and quarantines since the coronavirus began to hit Thailand harder in 2021 mean that labour migration has virtually ground to a halt, companies and labour activists say.

 

"They are jobs that Thai workers don't want to do," Suchart said, referring to labour-intensive factory work.

 

"We have talked about bringing in migrant workers, but it will be very difficult due to large numbers of infections."

 

Some factory owners are responding to the labour shortage by offering higher wages and bonuses to attract Thai workers, but the incentives have not been enough to entice locals into lower paid, low-skilled jobs, even as the country's unemployment rate hit a 12-year high this year.

 

"We've had quite a lot of orders. But because of not enough workers, we can only run at 75%-80% capacity," said Suparp Suwanpimonkul, deputy managing director of S.K. Polymer Co., which makes rubber parts, including for autos and electronics, and exports 43-45% of its products, mainly to the United States.

 

Exporters worry that similar production cuts will mean exports may not even reach the 10% growth forecast by the Thai National Shippers' Council for 2021, which is more modest than the central bank's expectation that exports will grow at an 11-year high of 17.1% this year.

 

The central bank last month cut its 2021 growth forecast to 1.8% amid surging coronavirus cases, and stricter containment measures imposed this month could further weigh on this year's outlook after the tourism-reliant economy shrank 6.1% in 2020.

 

Suparp, who is also vice chairman of the Thai National Shippers' Council, said the labour shortage now has firms competing for workers, with many offering pay above the minimum daily wage of 300 baht($9.13) – paying 400 or even 500 baht.His own company is trying to attract new workers with a six-month work bonus and a referral scheme of 500-1,000 baht per worker.

 

"But we still can't compete with other factories," he said.

 

The labour shortage has particularly hit lower-wage food, textiles, and some rubber producers, which together accounted for 20% of total shipments and brought in $27 billion in January-June 2021, compared with $44 billion for the whole of last year.

 

Thai electronics and autos makers, Thailand's top two export sectors, are still booming because the higher-wage sectors employ a larger percentage of Thai workers, relying less on migrants.

 

At Surapon Foods, which produces frozen shrimp and chicken products and exports 80% of its goods,

management has asked some of its 4,000 employees - of which more than one-third are migrants - to work overtime to meet export commitments.

 

"We are also short of workers but we can still manage,"

 

Sriprasert Sriprawatkul, Surapon's vice president of finance & accounting, told Reuters.

 

"But if we can choose, we would rather add more workers than paying overtime because it's cheaper," he added.

 

($1 = 32.85 baht)

 

(Additional reporting by Kitiphong Thaichareon; Editing by Kay Johnson and Ana Nicolaci da Costa)

 

-- © Copyright Reuters 2021-07-30

 

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[Scrotobike]

What about the 3m Thais not working in the tourist industry - labour redeployment?

[jacko45k]

Many countries are starting to use domestic labour due to the pandemic causing restrictions on people crossing borders..... surely that is an option for Thailand with so many being out of work. 

If salaries are far too low, put them up, or the Government should subsidize to a degree.... although past experience says a lot of the cash would be embezzled. 

Edited July 30, 2021 by jacko45k

[smedly]

13 minutes ago, Scrotobike said:

What about the 3m Thais not working in the tourist industry - labour redeployment?

555, I was going to say something similar but lets face it - the unemployed in Pattaya are not used to work - what they call work is sitting in a bar partying and getting free beer bought to them and then doing some other pleasurable service before they sleep and getting paid for the hardship lol - plus the sort of money they pay migrants - who would get out of bed for it - well they do but no Thai would

[EVENKEEL]

"But if we can choose, we would rather add more workers than paying overtime because it's cheaper," he added.

 

20 yrs ago I worked for a large Co. (factory)  in USA that operated 24/7. They put all workers on a 12 hr shift with OT paid after 8 hrs. and rotated days off. You never worked more than 2 days without 2 days off, every other weekend was a 3 dayer. They did this because it was proven the most efficient system.

[trainman34014]

Try getting Thai men to do a real days work !

[khunPer]

3 hours ago, Scrotobike said:

What about the 3m Thais not working in the tourist industry - labour redeployment?

A problem might be that they don't want to change work, especially to work that might have lower status.

 

I was surprised when I found out that some of our Thai friends, who used to work in tourism, prefers to be unemployed and just wait for better time, than taking up a job, even there plenty af available positions, which they considers as lower status.

 

The article also mentions that Thais consider the available job as low status, even if offered a higher salary the minimum wage...

“They are jobs that Thai workers don’t want to do,” Suchart said, referring to labour-intensive factory work.

[ ... ]

Suparp, who is also vice chairman of the Thai National Shippers’ Council, said the labour shortage now has firms competing for workers, with many offering pay above the minimum daily wage of 300 baht($9.13) – paying 400 or even 500 baht.

[billd766]

I suppose that firms could always pay a higher rate than the minimum and if they had any sense, they could also build some decent accommodation on site and rent it at a a reasonable price to the workers. 

 

The better you look after your staff the longer that the will be willing to stay and work.

 

The problem with that of course, is that it will affect your profits in the short term, which in turn will force you to raise your price.

[Smithson]

2 hours ago, billd766 said:

The better you look after your staff the longer that the will be willing to stay and work.

There's a long thread running in the farming section with ppl saying workers just won't stay, even if you pay them 15k and buy their kids pushbikes.

 

Here in the countryside you can't find men to work for B500 a day. It's a myth that employers choose migrants because they're cheap, it's because they work hard and don't/ can't leave at the drop of a hat.

 

Something that's not talked about often is that poor Thais don't get to keep their money, it MUST be shared with family members. So a wage increase means not just more demands, but also more headaches listening to the dramas and stuff ups like gambling debts, getting girls pregnant, trouble with the police etc.

 

Many of Pattaya's bar girls were the hardest working in the family. Easy money from tourists is a thing of the past, it will be interesting to see how things pan out.

[hotchilli]

7 hours ago, webfact said:

Thailand's exports have been a rare bright spot in the struggling economy, but migrant worker shortages are threatening labour-intensive sectors, undermining a fragile recovery as the country struggles with its worst COVID-19 outbreak yet.

Considering the treatment [or lack of] towards migrants during this pandemic, I can fully understand the shortage.

Back home in Myanmar must start looking brighter.

[Cake Monster]

The Migrant Workers are the backbone of Thailand.

These  hard working people will work in Jobs that Thais deem to be beneath them.

The position that the Thai Employers now find themselves in, is of their own volition.

They have bred a Society that is so reliant on Migrant Workers, who they have underpaid and abused for Decades now, in the pursuit of Profits, that any association with doing the same work by a Thai is deemed to be low Class by them.

Many Thais would rather sit around all Day doing nothing, and poncing what they can rather than doing some honest work to feed their Families.

 

 

[Smithson]

1 hour ago, Cake Monster said:

The Migrant Workers are the backbone of Thailand.

These  hard working people will work in Jobs that Thais deem to be beneath them.

The position that the Thai Employers now find themselves in, is of their own volition.

They have bred a Society that is so reliant on Migrant Workers, who they have underpaid and abused for Decades now, in the pursuit of Profits, that any association with doing the same work by a Thai is deemed to be low Class by them.

Many Thais would rather sit around all Day doing nothing, and poncing what they can rather than doing some honest work to feed their Families.

 

 

Yes, they are hardworking and support the economy. They are often employed by grassroots farmers, who I don't think can be blamed for the society being so reliant on migrant workers. It's much more complex than that. I'm not sure how many are underpaid and abused. As one employer told me "even migrants can choose their jobs".

 

You may be surprised just how difficult it is to find reliable labor here.

[billd766]

53 minutes ago, Smithson said:

Yes, they are hardworking and support the economy. They are often employed by grassroots farmers, who I don't think can be blamed for the society being so reliant on migrant workers. It's much more complex than that. I'm not sure how many are underpaid and abused. As one employer told me "even migrants can choose their jobs".

 

You may be surprised just how difficult it is to find reliable labor here.

I am 77 and I spend about an hour a day, 5 days a week cutting the grass and scrub on about 3 rai.

 

Why? Because I can still do it though it gets harder every year, and because my wife can't get anybody to do it for me.

[MrJ2U]

Always blaming something or somebody else.

 

All they have to do is look in the mirror and see who is to blame.

 

Everybody in Thailand knows.

[Deli]

Know a girl who worked in tourism until the Chinese Virus hit. Lost her job her job and couldn't find anything similar. Went to her hometown close to the Lao border and stayed with her 80+ years grandmother instead of taking a job in a factory. Unbelievable but this is how most of the Thais act.

[Scott]

Off-topic post removed.

 

[MrJ2U]

21 hours ago, Smithson said:

Yes, they are hardworking and support the economy. They are often employed by grassroots farmers, who I don't think can be blamed for the society being so reliant on migrant workers. It's much more complex than that. I'm not sure how many are underpaid and abused. As one employer told me "even migrants can choose their jobs".

 

You may be surprised just how difficult it is to find reliable labor here.

And when you do keep him!