One Million Possible Mass Lay-offs Likely: Labour Ministry

[george]

One million possible mass lay-offs likely: Labour Ministry

BANGKOK: -- A senior official of Thailand's Ministry of Labour on Thursday expressed concern that around one million workers in the Kingdom are likely to lose their jobs in the coming months.

Acting Minister of Labour Uraiwan Thienthong allowed that Thailand's current unemployment picture is clouded not only by the results from the domino effect from the global financial crisis but also from the last week's domestic political turmoil, especially the seizure of Don Mueang and Suvarnabhumi airports by the anti-government People's Alliance for Democracy.

Both negative factors aggravated unemployment and tremendously affected the tourism and export industries.

According the latest official statistics, 519 companies and firms were put out of business and nearly 45,000 workers were laid off.

Another 2,000 companies are likely to lay off 83,721 of their employees in the coming period.

Because of the ongoing situation, the ministry will adjust its policies, including the budget for dealing with unemployment crisis, said Mrs. Uraiwan.

The ministry will seek budget from the Cabinet to alleviate the effects of the lay-off crisis, she said, indicating that the budget of Bt1.5 billion is expected to be approved soon.

Budget will be allocated to meet the demand of the private sector.

-- TNA 2008-12-04

[Ricardo]

Sadly this will not surprise anyone, who has been following global economic/business news, over the past several months.

It might shock those officials at the BoT, who have regularly stated that the global crises were a foreign problem, which would not affect Thailand, and where domestic-demand would fully take up the slack next year. If only !

Perhaps they might consider helping exporters, and the tourism industry, by ending their strong-Baht policy ? The 1.0% cut in interest-rates this week is a welcome start, but if they keep spending hard-currency reserves, to prop up the Baht/US$ exchange-rate, then they will find themselves being blamed in-part for these job-losses.

It's a cold world out there, the storm-clouds have been visible for some time, and it will hit Thai jobs too, as this report confirms. I take no pleasure in saying - "I told you so".

[dumball]

NAH , it is a Myth , Tourism is not that important to Thailand , world crisis ? Will not effect Thailand , we are bullet proof , so sayeth the ever correct prophets of Thai-visa .

[mommysboy]

NAH , it is a Myth , Tourism is not that important to Thailand , world crisis ? Will not effect Thailand , we are bullet proof , so sayeth the ever correct prophets of Thai-visa .

Thailand is about to enter a very severe economic downturn. It's amazing that otherwise intelligent posters on this board have fallen for the myth that the farang money will never dry up. Domestic demand is poor. The Govt has not paid attention to stimulating demand with major plans, it keeps saying it will but it doesn't.

Thailand relies on strong tourism, manufacturing and commodity exports, all are now in crisis due to the incredibly high bt.

[khundon]

The last few days have done so much harm to Thai tourisim (I don't support any party) and many people will choose to spend their money elsewhere, also the ever changing visa rules don't help the economy.

[dumball]

The last few days have done so much harm to Thai tourisim (I don't support any party) and many people will choose to spend their money elsewhere, also the ever changing visa rules don't help the economy.

I whole-heartedly second that , well said !!!!!

[Martin]

It is more than two years since we were foreseeing this on this website. Some of us decided to shift our savings into gold.

I don't think that we thought the recession/slump/depression would come quite so quickly as, at that time, the sub-prime timebomb hadn't been heard ticking; but it was clear that the US and UK were running up unsustainable debts, nationally on Iraq and other public sector schemes and individually on credit cards.

"When the USA economy sneezes, the rest of the world catches a cold" has been true for so long, and there was no reason why it would be different this time.

However, Thailand is not fundamentally as badly off as many industrialised countries.

There has been a shortage of labour lately in rural areas, as so many (roughly 3 million men and 2 million women) have been away working in the urban areas in factories or construction or tourism. There's accomodation, food, work and fun for them back in their home villages.

Adjustment will be messy and painful, but it is possible here.

However, for more heavily industrialised countries that have been industrialised for so long that rural skills have been lost, read "The Long Emergency" by James Howard Kunstler and shudder.

(If you 'google' it, there is a one page (or maybe two page) review that summarises it.)

[mommysboy]

It is more than two years since we were foreseeing this on this website. Some of us decided to shift our savings into gold.

I don't think that we thought the recession/slump/depression would come quite so quickly as, at that time, the sub-prime timebomb hadn't been heard ticking; but it was clear that the US and UK were running up unsustainable debts, nationally on Iraq and other public sector schemes and individually on credit cards.

"When the USA economy sneezes, the rest of the world catches a cold" has been true for so long, and there was no reason why it would be different this time.

However, Thailand is not fundamentally as badly off as many industrialised countries.

There has been a shortage of labour lately in rural areas, as so many (roughly 3 million men and 2 million women) have been away working in the urban areas in factories or construction or tourism. There's accomodation, food, work and fun for them back in their home villages.

Adjustment will be messy and painful, but it is possible here.

However, for more heavily industrialised countries that have been industrialised for so long that rural skills have been lost, read "The Long Emergency" by James Howard Kunstler and shudder.

(If you 'google' it, there is a one page (or maybe two page) review that summarises it.)

I disagree with this post. Thailand is in deep trouble. Did you notice 2 downgrades this week, one from S + P.

[lordofdelusion]

My wife's family is feeling the pinch back on the farm. With the collapse of commodity prices, rubber trees just aren't yeilding any income. Even food products have dropped in value. I have no doubt the tourism industry will be devasted as well. This is a worldwide problem. Thailand is part of this world, so yeah, they will have problems.

[Seneque]

It is more than two years since we were foreseeing this on this website. Some of us decided to shift our savings into gold.

I don't think that we thought the recession/slump/depression would come quite so quickly as, at that time, the sub-prime timebomb hadn't been heard ticking; but it was clear that the US and UK were running up unsustainable debts, nationally on Iraq and other public sector schemes and individually on credit cards.

"When the USA economy sneezes, the rest of the world catches a cold" has been true for so long, and there was no reason why it would be different this time.

However, Thailand is not fundamentally as badly off as many industrialised countries.

There has been a shortage of labour lately in rural areas, as so many (roughly 3 million men and 2 million women) have been away working in the urban areas in factories or construction or tourism. There's accomodation, food, work and fun for them back in their home villages.

Adjustment will be messy and painful, but it is possible here.

However, for more heavily industrialised countries that have been industrialised for so long that rural skills have been lost, read "The Long Emergency" by James Howard Kunstler and shudder.

(If you 'google' it, there is a one page (or maybe two page) review that summarises it.)

I disagree with this post. Thailand is in deep trouble. Did you notice 2 downgrades this week, one from S + P.

As well i can't fully understand how workers out of the industry and moving back to their village will stop Thailand from the downturn ... ? They might survive and be self sufficient ... that is not what we can call growth ... The export industry is the core of the economy here and a policy of strong currency (as japan is feeling the pinch now) and a serious lack of demand will surely hit hard.

Wish them well though but stop dreaming.

[bina]

those that have been living subsistance level will continue living subsistance level; those that were living better will have to adjust , one of thte only plussses in being the poorest is that u are always poor so need no adjustements. and those that have been growing their own food and not really producing too much of anything for sale, it wont matter. my husband/s parents havent actually seen any real money since we sent some a few months ago (to bank account its not been touched). when i've asked if they need now, the answer is always, 'what for?" they wear the same clothes, eat the same foods, live in the same shack/shelter and do the same thing they've been doing for the past 60 year of their lives. its the newly urbanized, etc etc et al that will suffer just like in any other country ... and the urban poor of course who dont even grow their own basics but do need money to buy neccesities.

simplified of course.

bina

[LaoPo]

One million possible mass lay-offs likely: Labour Ministry

BANGKOK: -- A senior official of Thailand's Ministry of Labour on Thursday expressed concern that around one million workers in the Kingdom are likely to lose their jobs in the coming months.

It's probably an understatement and soft message...

With a workforce of around 37 Million in Thailand, 1 Million would mean a mere 2.7% unemployment -on top of the existing unemployment- (don't have facts yet but will try to find).

On top of that, 50% or some 18,5 Million people are working in agriculture and with commodity prices sliding and sliding as well as tourism sliding, the workforce is going to be hit a lot more severe than -just- 1 Million, I'm afraid.

Some countries, like Spain for instance, suffer already from an unemployment rate of 11% plus....and that's a country with more than 50 million tourists a year, same size as Thailand (more or less) and less in population (just 40 Million versus 65M for Thailand)

So: prepare....for an unemployment rate, much higher than the one million extra Thailand's Ministry of Labour is bringing out....gently.

In a year from now, or earlier, we could see a total of 3 to 3,5 million people, unemployed...and if it becomes real bad a number of over 4 million wouldn't surprise me.

LaoPo

[mommysboy]

One million possible mass lay-offs likely: Labour Ministry

BANGKOK: -- A senior official of Thailand's Ministry of Labour on Thursday expressed concern that around one million workers in the Kingdom are likely to lose their jobs in the coming months.

It's probably an understatement and soft message...

With a workforce of around 37 Million in Thailand, 1 Million would mean a mere 2.7% unemployment -on top of the existing unemployment- (don't have facts yet but will try to find).

On top of that, 50% or some 18,5 Million people are working in agriculture and with commodity prices sliding and sliding as well as tourism sliding, the workforce is going to be hit a lot more severe than -just- 1 Million, I'm afraid.

Some countries, like Spain for instance, suffer already from an unemployment rate of 11% plus....and that's a country with more than 50 million tourists a year, same size as Thailand (more or less) and less in population (just 40 Million versus 65M for Thailand)

So: prepare....for an unemployment rate, much higher than the one million extra Thailand's Ministry of Labour is bringing out....gently.

In a year from now, or earlier, we could see a total of 3 to 3,5 million people, unemployed...and if it becomes real bad a number of over 4 million wouldn't surprise me.

LaoPo

Yes I agree completely. Officialdom always starts with the soft version. First a soft landing, then a plateau, then a mild dip, and so on.

Thailand will suffer a severe economic recession made worse by a hamstrung Govt, political turmoil, and the usual base incompetence.

But actually, the incompetence is so bad that I'm beginning to think there are unseen parties that actually want this.

[astute]

I believe that Thailand has shut itself off to harsh against foreign investors. I know several people who wanted to open new media offices in Thailand. These companies are big on developing modern media products for the web and mobile phone.

Sadly enough, Thai law is so strict that they all diverted their course and are now going to try their luck in for example China where they welcome these kind of companies.

It is a shame, because many of these companies hire local talent to do coding and design, and have expats as managers to do all the senior stuff.

This might sound bad, but I believe this is THE way to prosperity as where the seniors educate the junior locals and in the end, the junior locals can become seniors and educate new junior locals and before you know it, the seniors start their own company and hire even more locals.

This way you can create a strong independent industry, something that we saw in Europe after that many American companies send seniors here and now the Europeans are taking over large American IT companies.

The only reason why they have such high demands is that they are affraid of people who will come to Thailand to profit over Thais, but as long as locals are cheaper, the locals will have the potential to take over the foreigners at some point. After that they can also earn more themselves.

It might take 20±50 years, but it sure will work!

[h90]

I believe that Thailand has shut itself off to harsh against foreign investors. I know several people who wanted to open new media offices in Thailand. These companies are big on developing modern media products for the web and mobile phone.

Sadly enough, Thai law is so strict that they all diverted their course and are now going to try their luck in for example China where they welcome these kind of companies.

It is a shame, because many of these companies hire local talent to do coding and design, and have expats as managers to do all the senior stuff.

This might sound bad, but I believe this is THE way to prosperity as where the seniors educate the junior locals and in the end, the junior locals can become seniors and educate new junior locals and before you know it, the seniors start their own company and hire even more locals.

This way you can create a strong independent industry, something that we saw in Europe after that many American companies send seniors here and now the Europeans are taking over large American IT companies.

The only reason why they have such high demands is that they are affraid of people who will come to Thailand to profit over Thais, but as long as locals are cheaper, the locals will have the potential to take over the foreigners at some point. After that they can also earn more themselves.

It might take 20±50 years, but it sure will work!

An Internet company, taking creditcards and need good internet connection has it difficult in thailand.

If you would make that simple, you could create a lot of jobs in a short time, which sells cheap handmade product and creates even more jobs....

[astute]

*snip*

An Internet company, taking creditcards and need good internet connection has it difficult in thailand.

If you would make that simple, you could create a lot of jobs in a short time, which sells cheap handmade product and creates even more jobs....

I don't believe that is true.

In Europe the use of credit cards is not that common, there are plentiful ways of paying. And you don't even need paying as you can also profit by advertisement. And you can find plenty of advertisement in Thailand already.

Don't worry about his business model. As where these people now succeed in China, where internet is also slow and also creditcards are not the standard, they are making good profits and hired about 100 local people with 10 expats. All because China gave them a chance, and a country like Thailand that is very strict on foreign investments and businesses didn't.

Those 100 people hardly had any education except basic high school and learned to program computer software and mobile phone applications within a few months time and are now training new employees.

It's how IBM, Hewlet Packard and many more large IT companies did it in the 70's. Hire high school students that are eager to work and train them, they will slowly but surely climb the ladder. If they don't, you can fire them and as where they weren't that expensive, it isn't that big of a loss.

Where "cheap handmade products" can be produced everywhere, in this case you are actually creating knowledge and make locals able to compete with large companies from Europe, Japan and the US. Every country with cheap labour can produce handmade rubbish. Not every country can compete with high tech development.

Edited December 4, 2008 by astute

[easybullet3]

can anyone tell me why the thai baht has been pretty much unaffected by the past political turmoil? (especially that the airport was blockaded for a week) the baht barely dropped!!! (i'm comparing it to the pound and the dollar).

i heard somewhere that thailand has MASSIVE gold reserves or surplus cash. (does this have any baring on the situation).

i am just suprised that after 6 months of political uncertainty and especially the past airport siege AND world-wide economic depression, that the thai baht has pretty much kept its value!!!

can anyone explain this?

and also any predictions for the baht?

[geriatrickid]

I'm sure TV's PAD supporters will gladly help these victims. Perhaps some people can convince their chihuahuas to share space with the homeless. TV's proud PAD supporters no doubt accounted for the projected pain and suffering, and have this issue under control. Have no fear, PAD is a caring organization and will feed, clothe and care for those displaced.

[ballbreaker]

can anyone tell me why the thai baht has been pretty much unaffected by the past political turmoil? (especially that the airport was blockaded for a week) the baht barely dropped!!! (i'm comparing it to the pound and the dollar).

i heard somewhere that thailand has MASSIVE gold reserves or surplus cash. (does this have any baring on the situation).

i am just suprised that after 6 months of political uncertainty and especially the past airport siege AND world-wide economic depression, that the thai baht has pretty much kept its value!!!

can anyone explain this?

and also any predictions for the baht?

BOT has been using its large US dollar reserves to control the value of baht against the dollar. That is one reason some of the other currencies have taken a bit hit in recent months against the baht.

[wasabi]

Just raise the prices on the suckers who still come here for a holiday. This is the Thai tradition.

[Gravelrash]

I'm sure TV's PAD supporters will gladly help these victims. Perhaps some people can convince their chihuahuas to share space with the homeless. TV's proud PAD supporters no doubt accounted for the projected pain and suffering, and have this issue under control. Have no fear, PAD is a caring organization and will feed, clothe and care for those displaced.

I can understand why TV would have PAD supporters, it is just the reasons they put forth are so shonky, and some in particular wouldn't know what day it was. As a conservative, steady as she goes stance it is reasonable.

I still maintain that the Democrat/PAD alliance misplayed the airport fiasco, seems many usually subtle supporters of PAD such as the Democrats have made it too obvious staking their legitimacy on that imbecile act.

The Democrats as an opposition are pathetic, despite their claims to the contrary. Political leaders worldwide have been getting bonus points for being seen to be doing something and providing leadership. Here the inept government was just waddling along, what an opportunity for the Dems to play the long game and hammer them relentlessly with better, decisive policies (including helping the poor). Add to that as the recession worsens they would look a better option by firstly having identifyed the problem and having had solutions.

But no, they play the short game and support the PAD in closing the airport and completely lose any economic credibility. Not only that, if the government somehow survives a coup, they will point to the PAD and their supporters as causing all the unemployment, ie not their fault. And that claim will have credibility to Thailand-centric minds.

[misterman21]

It is more than two years since we were foreseeing this on this website. Some of us decided to shift our savings into gold.

I don't think that we thought the recession/slump/depression would come quite so quickly as, at that time, the sub-prime timebomb hadn't been heard ticking; but it was clear that the US and UK were running up unsustainable debts, nationally on Iraq and other public sector schemes and individually on credit cards.

"When the USA economy sneezes, the rest of the world catches a cold" has been true for so long, and there was no reason why it would be different this time.

However, Thailand is not fundamentally as badly off as many industrialised countries.

There has been a shortage of labour lately in rural areas, as so many (roughly 3 million men and 2 million women) have been away working in the urban areas in factories or construction or tourism. There's accomodation, food, work and fun for them back in their home villages.

Adjustment will be messy and painful, but it is possible here.

However, for more heavily industrialised countries that have been industrialised for so long that rural skills have been lost, read "The Long Emergency" by James Howard Kunstler and shudder.

(If you 'google' it, there is a one page (or maybe two page) review that summarises it.)

So what happens when America catches Phnumonia - my dreaming friend!

[klikster]

Don't worry about his business model. As where these people now succeed in China, where internet is also slow and also creditcards are not the standard, they are making good profits and hired about 100 local people with 10 expats. All because China gave them a chance, and a country like Thailand that is very strict on foreign investments and businesses didn't.

Those 100 people hardly had any education except basic high school and learned to program computer software and mobile phone applications within a few months time and are now training new employees.

It's how IBM, Hewlet Packard and many more large IT companies did it in the 70's. Hire high school students that are eager to work and train them, they will slowly but surely climb the ladder. If they don't, you can fire them and as where they weren't that expensive, it isn't that big of a loss.

Where "cheap handmade products" can be produced everywhere, in this case you are actually creating knowledge and make locals able to compete with large companies from Europe, Japan and the US. Every country with cheap labour can produce handmade rubbish. Not every country can compete with high tech development.

Those 100 people may not have had much training, but China has some really top programmers .. Java, C, you name it. They work harder than SE Asians and they make lower salaries than Thais at the same level. (not sure about Vietnamese).

The Indians and Chinese are on a roll.

[cymruambyth1]

James Howard Kunstler and shudder.

Surely you would HAVE to change that name, wouldn't you?

[thailand_tom]

unreal, everyone knew going from 14 million tourists in 2007 to, est. of 6 - 7 million in 2009 and beyond ,what was going to happen, too many other places in the world to go too, that will welcome you , no real internal conflicts , no bombings, and your money will be worth more, my wife goes back i think sunday, just waiting for her passport to get back, i'm heading east, and if i leave the usa again i'm going to costa rica..i can own myself, no bs like i'm going through now, with my brother in-law, 500 to 1usd, women just as cheap

[LaoPo]

Excuse me....but THIS thread is about:

One Million Possible Mass Lay-offs Likely: Labour Ministry and thus discussing about unemployed people in Thailand.

Unemployment is rising fast in the western world and Thailand can't escape.

USA jobless' rate rises to 6.7% or 10,3 million, a 15 year high.

For Thailand that would mean more than 2,5 Million unemployed workers...on a 38 million work force.

LaoPo

[plachon]

Pre-1997 in Thailand, if you graduated with a degree, you could be fairly sure there was a job waiting for you at the end of Uni. The Asian crash changed that comfortable old reality and since then things have been becoming more competitive in the labour market, yet still Thailand has been churning out degree students from "Universities" at an alarming rate. It just became a factory line, with all the old teachers and vocational colleges upgrading to university status and handing out degrees willy-nilly to anyone that would pay the enrollment fee. Even Nong Oak got a degree from Ramkhamhaeng University where he was caught red-handed cheating in his final exams. Meaningless bits of paper in so many cases. So even, if the credit crunch, global recession and political troubles had not occurred, I submit that Thailand's competitiveness would have slid anyways and mass unemployment would have been inevitable. Because they seemed to give up teaching a lot of students practical skills in vocational colleges as in the past, there was bound to have been a decline in people well qualified for manufacturing sector, while MBA's and computer studies can only go so far, when everyone has already opened up more than enough hair salons, internet cafes and mobile phone kiosks already.

[TAWP]

An Internet company, taking creditcards and need good internet connection has it difficult in thailand.

If you would make that simple, you could create a lot of jobs in a short time, which sells cheap handmade product and creates even more jobs....

I would disagree.

First of all, the payment service is more than often handled by a third party. It may not look like you are exiting a sites web-page and anything is handled externally, but it is.

Secondly, the company putting up the service doesn't need anything above a 10Mb connection. You don't serve the content from a Thai webserver if you are aiming for an international audience. There are web-hosts all over the world that you can use, all depending on the region of your designated customers.

Sadly a lot of companies are either re-locating to or directly setting up in for example Singapore (which is far more expensive) due to the larger pool of experienced staff to choose from, better international standing with investors and...well, since other companies in the same industry are located there. Some content companies are setting up in China (including few gamestudios like UBISoft Shanghai), but they are really the exception.

In any way, counting the number of internet based/content creating (some atleast)/enterprise software focused/game companies (any plattform) per capita, Thailand is really...really far behind.

It takes us 6 month to fill one (1) position and there are never basically any senior developers to find.

[Polemi]

When you discuss the Thai tourism, lack of planning, rising the prices for tourists etc it sounds just the same as Greece, where I live.

We are being badly hit by the bad economy. The answer is always to rise the prices on food etc in the tourist areas. The only difference for you guys in Thailand is that the "suckers" (tourists I guess?) from Europe will still find it very cheap in Thailand, so maybe it will not get so badly hit as you think? Have been coming to Thailand as a tourist for over 20 years and with the exchange rate it is still very cheap for us. I will still be coming!!!!

[Tigs]

I just stayed in the Amari Hotel at Don Muang Airport for a night prior to coming home. A nice hotel that had done well to recover from the devastating blow of the move of 90% of airbusiness to Swampy. I often stay the night before a flight (no hassle in the mornings etc) and things were looking up for it. Last night, it was like tumbleweed blowing through the place. Since the well thought out plan by PAD, occupancy has plummeted to 8%. A senior member of staff told me last night that if things do not pick up significantly within 3 months the hotel will close. Very sad for all the staff. Well done PAD! (and that is just one hotel, there are similar stories throughout the city).