Thai labour market faces dual challenges

Economy February 28, 2015 01:00


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THAILAND IS facing two challenging factors - greater connectivity of social and economic communities in the world and the emergence of an ageing society - that will actively shape the country's labour market.

The Asean Economic Community, effective by the end of this year, will also encourage a bigger flow of labourers within the region. The number of workers migrating into Thailand will rise as they seek higher incomes and better living standards.

Nakorn Silpa-archa, permanent secretary of the Labour Ministry, said Thailand became an ageing society in 2003. The United Nations has projected that by 2030, people older than 65 will represent about 23 per cent of the country’s population.

Thailand is not alone on this route. By 2025, the population aged above 65 will exceed 65 million in Asean. That is about the size of Thailand’s population today. It is inevitable that this trend will soon emerge in many newly developed and developing countries.

In a speech at the fourth Australian National University-Dhurakij Pundit University Conference, held in collaboration with the Centre of Excellence in Population Ageing Research (CEPAR) and the Labour Ministry on Thursday at DPU, Nakorn said the trend would surely shape Thailand’s labour market, welfare systems, social cohesion and the path to the country’s prosperity.

“These challenges will transform our societies. However, whether this transformation will be for the better or for the worse will depend on our capacity to come up with innovative solutions to address these challenges,” he said.

“In addition, as the world becomes more connected socially and economically, decisions to migrate to seek better opportunities beyond one’s motherland is on the rise. Taking both ageing and migration into account, one can see that labour markets across the globe are in a transformational period.”

Associate Professor Varakorn Samakoses, DPU president, said Thailand’s population structure was changing rapidly, and approaching a “full ageing” society. In about seven years, one-fifth of the population will be over 60 years old.

Ageing brings about changes in the labour market. It is also a good opportunity for people from other countries to migrate to replace the ageing labour force. These changes must be dealt with carefully. Informed policies have to be made simultaneously on several fronts. Thus it is the right time for Thailand to look around for lessons that will help it cope better with the challenges.

At the same forum, Professor David Card, a labour economist and professor of economics at the University of California, Berkeley, spoke about structural change in the labour market as the economy develops, using the US labour market as a case study.

Migration patterns have changed over time from just unskilled migration to skilled workers as well moving into the country. This pattern has already happened in the United States and it will also happen in the near future in Asia, including Thailand, he said.

“We cannot have just one set of migration policies to deal with both skilled and unskilled migrants at the same time. Skilled migrants need a more flexible screening procedure in order to attract the right group of skilled migrants to the economy,” Card said.

He said Thailand was both an importer and exporter of migrant workers. It has imported unskilled migrants to reduce shortages in its labour market, but the country has also lost a lot of skilled workers who have moved overseas for higher incomes.

Meanwhile Bruce Chapman, an economist and professor at Australian National University, said the migrant-exporting countries used public money to invest in higher education of their citizens. But these graduates tend to move overseas, thus they cannot contribute to their home country. Therefore the importing countries, such as Australia, have to find a way to compensate for these migrants.

Kiatanantha Lounkaew, assistant to the vice president for research at DPU, said: “We have a lot of support from the ministries of Labour, Public Health, Agriculture and Agricultural Cooperatives, and Social Development and Human Security. But that is not enough, because we do not have a comprehensive database on migrants, which makes it difficult for us to monitor them. If we cannot monitor them, we will not be able to look after them as well as we would like to.

“Illegal migrants are still a challenge for Thailand. We have to find a way to bring them into the system. There are many policies that are already in place, but they need to be rigorously evaluated to see what works or does not work so we can channel resources accordingly,” he said.