Proactive measures needed to cope with ageing society
THAILAND’S labour market will stagger under the weight of its growing elderly population if it does not come up with practical solutions soon.
At present, more than 16 per cent of Thais are over 60 years old – the mandatory retirement age for civil servants and soldiers. In the private sector, some firms even require employees to retire at the age of 55.
Such a mandatory retirement age would not pose a problem if the country still had plenty of young people working across all industries and driving the Thai economy.
But given the size of Thailand’s elderly population and the falling birth rate, the country needs to carefully plan for its workforce as well as for the elderly.
The Bank of Thailand (BOT) has already warned that Thailand’s ageing society will face greater challenges than other nations as the country has less time to prepare for such a significant population shift. Thailand has become an aged society in a matter of 20 years, while other nations have up to 115 years to prepare for it.
In Asean, Thailand currently has the largest percentage of elderly people. When compared with other Asean nations, the number of Thailand’s working-age citizens is also dropping at a faster rate.
Current statistics suggest that the number of Thais aged over 65 will account for 13 per cent of the total population by 2020, a big jump from the current 7 per cent.
“The growing elderly population will affect Thailand’s economic growth,” the BOT said in its recent report.
When the percentage of those aged over 60 goes up by 10 in a country, the per capita income there will slow by 5.5 per cent, according to the BOT’s estimates based on overseas cases.
Since 2013, Thailand’s employment rate has fallen by 0.04 per cent a year. The drop is also noticeable in the working-age group, because women tend to leave their work to care for children, ailing family members or elderly at just 45 years of age. In other countries such as Japan, people quit the labour market after age 55.
Thai women who have stopped working at a relatively young age are mostly those with little education and many have not even completed junior secondary education.
The BOT has recommended that Thailand should start increasing the skills of working Thais and offer them greater flexibility.
Such ideas have received support from many who suggest that the elderly should be allowed to work shifts with flexible work hours – not the standard 9am to 5pm routine.
If Thailand does not make efforts to retain the healthy elderly in the labour market, the burden will be heavy on the country’s working people.
At present, four working people practically help take care of one elderly person on average. But if nothing changes, the ratio of working Thais to elderly will rise to 1:1 by 2031.
It must also be noted that Thailand will become a hyper-aged society by 2035. This means if the country does not create mechanisms or opportunities for the elderly to contribute to the labour market and the economy, it will face big challenges.
Reports suggest that most Thais are prone to ageing before they have set aside enough savings for their post-retirement lives.
Even though the state now offers a monthly subsidy of at least Bt600 for every elderly Thai, that is by no means enough for survival.
Besides, the country’s labour market needs staff to run business operations. Without a ready workforce, investors will be reluctant to put their money in Thailand.
So, it is high time that all relevant sectors start giving serious thought to empowering the elderly for the labour market. The move, after all, will benefit not just investors or business owners but also the elderly and the country itself.