The effects of high oil prices, a strengthening baht and economic slowdown are together weighing heavily on the labour market. According to estimates by the Labour Ministry and independent labour experts, the unemployment rate is expected to rise significantly as business operators begin to cut production cost by shedding their non-essential workforce.

Mass layoffs, particularly in some sectors, may become inevitable.

The minimum daily wage for unskilled labour is likely to be capped at Bt184 for the time being. Labour's demand for a higher minimum daily wage of up to Bt233 is not likely to be considered by the tripartite wage committee - comprising representatives of the government, employers and workers - as long as the economic prospects remain uncertain.

It may be true that the rise in the cost of living due to high oil prices is hitting low wage earners the hardest, but any further rise in the minimum wage at this point could produce consequences that will hurt workers more than help them. It must be remembered that the competitiveness of Thailand's manufacturing sector is less than impressive to begin with.

Government planners, employers and labour unionists would do better to put their heads together and find ways to ensure optimal overall employment as Thailand struggles to ride out this economic storm. Raising the minimum wage, which in any case was adjusted as recently as the beginning of the year, is out of the question. Although the minimum wage applies to unskilled or semi-skilled workers, all employers use it as a reference point for setting the pay scales of all their staff.

The government should focus on toughening enforcement of laws to improve general working conditions, refining the unemployment insurance scheme, and improving workers' skills through job training and adult education. It must also redouble efforts to make sure that the current minimum wage is matched by higher productivity to ensure that Thailand, an export-led economy, stays competitive in the global marketplace.

Thailand has for years been squeezed between more technologically advanced competitors and those with lower labour costs. The country has not been very successful in its efforts to move up the technology ladder towards higher value-added production because of a persistent failure to improve workers' skills.

As far as protection of workers is concerned, the government must find a solution to the continuing use of the "flexible labour force" strategy used by many employers to keep production costs low. This underhand practice deprives workers of their legal right to welfare benefits and protection.

Under this arrangement, employers hire workers on short-term contracts or through outsourcing arrangements to avoid observing workers' basic rights and responsibility for their social security benefits.

The Labour Ministry and law enforcement authorities, whose job it is to see that employers strictly observe labour laws and that workers' rights are fully protected, could do a lot better. Corrupt government officials who take bribes to turn a blind eye to illegal practices and unscrupulous employers must be punished.

However, there is at least good news for the hundreds of thousands of migrant workers from neighbouring countries, most of them unskilled or semi-skilled, who provide much-needed services in this country. Now that the government requires that they be legally registered, they have better protection against exploitative Thai employers.

The Social Security Office has also come up with a proposal to incorporate these foreign workers into the social security system so that they will be entitled to the wide range of services available to Thai workers, from healthcare to lump-sum retirement benefits. Taking good care of productive workers that make a useful contribution to the country's economy, regardless of their nationality, is a major step forward for Thai society, and definitely a cause for celebration.