November job losses hit 70,000

About 70,000 jobs were lost in November, and many more are expected to follow in the next six months as the global economic crisis reaches Thailand, forcing business operators into more lay-offs, says the National Statistical Office (NSO).

Last month, the number of unemployed reached 520,000, up from 450,000 in October.

The unemployment rate crept from 1.2 per cent of the workforce in October to 1.4 per cent in November.

"Unemployment is 1.1-per-cent higher year on year. It's worrisome, given that unemployment is rising in the last quarter, when unemployment is usually the lowest of the year at that time," secretary-general Thananuch Tritipphayabutr said yesterday.

The results were from a national survey designed to demonstrate the effects of the economic slowdown on business operators and individuals.

The National Economic and Social Development Board earlier predicted unemployment of at least 2-2.5 per cent next year, up from 1.4 per cent estimated for 2007. That would mean 900,000 workers out of the 37.6-million-strong workforce out of a job.

Thotsaphon Wangsilabat, president of the Federation of Thai Industries in Ayutthaya, said in his province alone, which housed the largest number of electronic manufacturing plants, 100,000 workers could be laid off.

"Our survey shows orders have fallen 50-80 per cent and that executives must review data on a weekly basis. The manufacturing sector is in dire need of a government injection [of funds]," he said.

Bank of Thailand Deputy Governor Atchana Waiquamdee admitted unemployment could rise further but insisted the situation would not be as severe as in 1997, due mainly to the healthy condition of the banking industry and the overall economy.

An NSO survey showed 96 per cent of large companies employing more than 200 employees agreed the global economic crisis had reached the Thai economy, with 58.6 per cent saying the impact was severe. While 90.2 per cent believed their own business would be affected, 98.1 per cent said they would continue operations, 0.7 per cent would shut down temporarily, 0.6 per cent would shut down permanently and 0.6 per cent would change their business. The operators confirmed they had witnessed a drop in orders, net profit, liquidity and customer payments.

"Notably, the problems are expected to intensify in the next six months," Thananuch said.

The NSO survey showed 10.2 per cent of business operators had laid off permanent staff, while 19.1 per cent had shed temporary workers and might lay off permanent employees in the next six months.

As well, 8.3 per cent said they had cut the work period, while 13.6 per cent planned to follow suit in the next six months; and 43.3 per cent had cut overtime hours, while 48.7 per cent would do so in the next six months.

The NSO expects hotel and restaurant operators as well as auto, motorbike, electronics, jewellery and furniture factories to lay off workers in the next six months, There is also high possibility that more subcontract workers in the auto and motorbike plants will also be axed in that period.

Despite the economic slowdown, the average monthly expenses of Thais have risen from Bt14,500 last year to Bt16,105 this year. They have cut spending on luxury items while still being thrifty with fuel and energy. This has led the NSO to estimate that poverty will affect 8.9 per cent of population this year, up from 8.5 per cent last year.

"It's frightening, because the poverty rate had been declining since 2002," the NSO's Thananuch said.

Meanwhile, 200 workers of Sammi Sound Tech (Thailand) in Samut Prakan closed Theparak Road yesterday in a bid to pressure the Labour Protection and Welfare Department's local office to make the company's South Korean owners pay compensation.

They said the plant closed two months ago but that the employers fled and failed to pay compensation yesterday as promised.

One worker said total compensation would amount to Bt16 million but that the employer had paid out only Bt4 million.