Unemployment And Household Debt Expected To Soar In Coming Months: Thailand

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Unemployment and household debt expected to soar in coming months

Thanapat Kitjakosol

The Nation

The flood disaster is expected to have a dramatic impact on the labour market with the number of unemployed rising by three to four times.

The Office of the National Economics and Social Development Board (NESDB) said yesterday that Thailand had 260,000 people out of work in the third quarter of this year and the flood had significantly affected workers' quality of life.

The unemployment rate was expected to increase to 700,000-920,000 people, with household debts also rising.

NESDB deputy chief Suwannee Khamman said staff monitoring social developments in the third quarter found employment increased by 1.6 per cent from the same period last year, with construction employment up the most at 4.3 per cent. There were less out of work - the unemployment rate was 0.7 per cent of 262,440 persons - compared to 0.9 per cent in the same period last year. But the real value of income only rose slightly by 3 per cent while the inflation rate continued to increase. Wages (excluding welfare) increased by 7.2 per cent, while inflation rose to 4.1 per cent, she said.

The skilled labour shortage indicated a long-term trend that the economy, largely using labour, must shift to use intensive technology and more productive labour. So, vocational education needed to provide the people with necessary skills, while cooperation between the public and private sectors should help improve work skills and investment in research and development for production innovations.

The flood disaster had affected the labour market and workers' quality of life, she said. In the short term unemployment was likely to rise to 1.8-2.3 per cent or 700,000-920,000 unemployed in the last quarter while workers' overall income would drop by Bt157 million per day even though living costs were rising, she said.

The first half of the year saw household debts rise to Bt136,456 per home - an increase from Bt134,699 in 2009, she said. However the number of households in debt was down to 56.9 per cent from 60.9 per cent in 2009.

It was expected that, for the rest of the year, the household debt would rise while savings would drop due to lower incomes because of the flood disaster, whilst living costs had risen during and after the flood.

There were 121,788 flood-affected people with mental health issues from July 25-November 25 while Thai people's happiness index dropped to 5.98 in October.

Suwannee said that overall crime had increased by 12.8 per cent with 81,457 cases, although thefts, at 12,894 cases, were down 16 per cent from the same period last year but 21.5 per cent up from the previous quarter. Instances of theft were expected to rise in the last quarter, as people had to flee their homes due to the flood crisis.

The government plans to help business operators via a Bt2,000-per worker assistance budget so firms can continue to hire workers and pay them at 75 per cent of their wage although many had to stop work due to the flood. She said 120,000 business operators had asked for such help - beyond the target of 100,000 cases - so officials would propose that Cabinet give such help to 200,000 cases.

-- The Nation 2011-11-29

[givenall]

Not surprise at all. Every time I was at the store andeveryone were panic baying and loading with shopping card everything because ofthe threat of flood and most were using their credit card. So now it is thetime to pay and no job because of the flood and no money to cover the creditcard payments

Thank You Miss PM and Mr. T

[samjaidee]

How do they know how many people are unemployed? If it was a welfare state then they would have the information about those claiming unemployment benefit. There must be so many people outside the tax system surely any figures quoted can only be guesses.

[lannarebirth]

Household debt soaring is the very hallmark of a Thaksin administration. Some other government will be left to pick up the pieces somewhere down the line.

[anterian]

Household debt soaring is the very hallmark of a Thaksin administration. Some other government will be left to pick up the pieces somewhere down the line.

"Household debt soaring is the very hallmark of a Thaksin administration.". What a profoundly glib statement!

[Soutpeel]

There were 121,788 flood-affected people with mental health issues from July 25-November 25...

Only 121,788.....would have thought there would be more in Thailand, I wonder how many of these sit in goverment departments ?...

[lannarebirth]

Household debt soaring is the very hallmark of a Thaksin administration. Some other government will be left to pick up the pieces somewhere down the line.

"Household debt soaring is the very hallmark of a Thaksin administration.". What a profoundly glib statement!

Not glib, but I sometimes do forget that not everyone recalls "Thaksinomics".

Thaksin claimed he loved taking large risks. Most business risks are about debt. The same is true of Thaksinomics, which involves three kinds of debt risk.

The first is household debt. Thailand was formerly a saving society. The rate of savings (GDS) was in the range of 30 to 40 percent, among the highest in the world and adequate to cover the investment needed for growth. The Thaksin government has encouraged people not to save but to consume, and to go into debt to consume. Household debt has roughly quadrupled.

http://books.google.com/books?id=bPjRk3FMEJwC&pg=PA130&lpg=PA130&dq=thaksin++household+debt&source=bl&ots=AFQvZvlJ3V&sig=29qAre9M1hHoA51ff769WFkRL0Y&hl=en&ei=FXnUTrzhLMKGrAevmPyUDg&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCYQ6AEwAA#v=onepage&q=thaksin%20%20household%20debt&f=false

[anterian]

Household debt soaring is the very hallmark of a Thaksin administration. Some other government will be left to pick up the pieces somewhere down the line.

"Household debt soaring is the very hallmark of a Thaksin administration.". What a profoundly glib statement!

Not glib, but I sometimes do forget that not everyone recalls "Thaksinomics".

Thaksin claimed he loved taking large risks. Most business risks are about debt. The same is true of Thaksinomics, which involves three kinds of debt risk.

The first is household debt. Thailand was formerly a saving society. The rate of savings (GDS) was in the range of 30 to 40 percent, among the highest in the world and adequate to cover the investment needed for growth. The Thaksin government has encouraged people not to save but to consume, and to go into debt to consume. Household debt has roughly quadrupled.

http://books.google....%20debt&f=false

I suspect we are talking about different sections of society, whilst GDS may have been 40 % prior to Thaksin, I suspect that this figure was composed of mostly the affluent, an average is a poor measure, a true "mean value" is more significant.

The poor have never been a saving society, in any country. The poor live from day to day, week to week, they scratch an existence.

You cannot save on a pittance, not that they have a bank book anyway.

Thaksin made the mistake of introducing cheap house purchase mortgages, many poor people purchased their first home with such a mortgage but with no real understanding of the repayment structure. They went into default and the banks repossessed, about 20% of the houses in my village are empty and repossessed by the banks. These are now non performing toxic assets for the banks.

Thaksin like many rich people just did not understand the total economic, budgetary ignorance of the average poor Thai. People to whom savings are a gold chain.

[lannarebirth]

"Household debt soaring is the very hallmark of a Thaksin administration.". What a profoundly glib statement!

Not glib, but I sometimes do forget that not everyone recalls "Thaksinomics".

Thaksin claimed he loved taking large risks. Most business risks are about debt. The same is true of Thaksinomics, which involves three kinds of debt risk.

The first is household debt. Thailand was formerly a saving society. The rate of savings (GDS) was in the range of 30 to 40 percent, among the highest in the world and adequate to cover the investment needed for growth. The Thaksin government has encouraged people not to save but to consume, and to go into debt to consume. Household debt has roughly quadrupled.

http://books.google....%20debt&f=false

I suspect we are talking about different sections of society, whilst GDS may have been 40 % prior to Thaksin, I suspect that this figure was composed of mostly the affluent, an average is a poor measure, a true "mean value" is more significant.

The poor have never been a saving society, in any country. The poor live from day to day, week to week, they scratch an existence.

You cannot save on a pittance, not that they have a bank book anyway.

Thaksin made the mistake of introducing cheap house purchase mortgages, many poor people purchased their first home with such a mortgage but with no real understanding of the repayment structure. They went into default and the banks repossessed, about 20% of the houses in my village are empty and repossessed by the banks. These are now non performing toxic assets for the banks.

Thaksin like many rich people just did not understand the total economic, budgetary ignorance of the average poor Thai. People to whom savings are a gold chain.

I'll bet they wish they still had those Gold chains now.

[elgato]

Who makes up these numbers? If all workers in Thailand were registered I could understand that they have a base figure but hey, TIT!

[1bbcd5]

a great site,many useful information!

[pisico]

Who makes up these numbers? If all workers in Thailand were registered I could understand that they have a base figure but hey, TIT!

You are right.

The informal economy, ie: food stands, knickknack stands, ambulant vendors of fruits, roasted roaches and crickets, second hand and new items vendors all over every city and village in Thailand amount to many millions of people who are not inspected, registered and therefore pay no taxes.

Those are guesstimates because they have to justify their bloated salaries, as every administration has always done. It goes on in Thailand since time immemorial, before Abhisit, Chavalit, Thaksin and all the way back to Pibunsongkhan and beyond. This is Thailand a country that will continue developing for many more decades. Alay goday!

[IsaanUSA]

Not surprise at all. Every time I was at the store and everyone were panic baying and loading with shopping card everything because of the threat of flood and most were using their credit card. So now it is the time to pay and no job because of the flood and no money to cover the credit card payments

Method of payment does not indicate debt level. MANY people use credit cards due to convenience or to gain reward points.

[cup-O-coffee]

I always wondered about the accuracy of these numbers, and if they weren't meant to manipulate results.

For instance, in the USA, unemployed workers are only on the unemployment list for 6 months (the time that they collect unemployment). After that, they drop off the radar.

So, the point being, how long are Thais listed on an unemployment report? When do they get removed from the list? How is each individual person tracked for when they get another job that does not report income tax?

I am quite certain that all government records of their citizens are so skewed beyond belief that any reports that come from any ministry or agency is bound to be full of errors.

This is another example in what I am seeing as a trend here in the LOS; that there is a great communication divide between the government and its people. The people do what they do, and the government does what it does, and the twain do not come together if they can absolutely help it.

In the mean time, it is best guess by both sides with regard to what each other thinks the other one is actually doing.

Regarding any action towards what the twain think of each other? It is the usual Thai method of resolving issues; i.e. crackdowns by the government and riots by the people.

What goes on in between seems to be nothing more than greed, savagery, hoarding, cheating, lying, corruption, apathy, staring catatonic-like at the television, graft, disobedience, obsession with sex, drinking, gambling, human trafficking, bribery, blackmail, extortion, etc. until the lid pops and you have a crackdown or a riot.

The crackdowns and riots, of course, come about when there aren't enough foreigners feet to lay the blame at -or- it is found that there are not enough bits of condemning evidence, after first destroying the foreigners visit or life.

Until this great divide is bridged, all issues (such as dubious unemployment statistics) will invariable come back to the latter portion of my post here. If one doesn't clean up their house, they shouldn't venture forth to fix other things.

This is my opinion.

Edited November 30, 2011 by cup-O-coffee