Thai Labor 2023 Survey: Increased Employment But Rising Debt

On the occasion of National Labor Day on May 1, Montri Mahaplerkpong, the vice-chairman of the Federation of Thai Industries (FTI), revealed the 28th FTI member survey (FTI poll) on the topic of “Industrial Sector Perspectives on Employment and Workforce Adaptation in the Future” in April 2023, .

It was found that a majority of the FTI executives, 48.6 per cent, believed that the current employment rate has returned to pre-COVID-19 levels. Meanwhile, 24.8 per cent expected the employment rate to increase by 10-20 per cent, while 19.3 per cent anticipated a decrease in the employment rate by 10-20 per cent.

“The majority of FTI executives, 50 per cent, expected that industrial sector employment trends will remain stable this year. Meanwhile, 35.3 per cent believed that employment trends will increase, while 14.7 per cent anticipated a decrease in employment trends.”

In addition, FTI executives proposed that the government accelerate support and promotion to increase labour efficiency, especially by supporting a skill-based wage payment system and raising workers’ skill standards to international levels.

They also suggested expanding tax incentives for spending on labour training to improve the skills which would qualify for the same level of the 250 per cent tax deduction for advanced skills training certified by the Office of National Higher Education Science Research and Innovation Policy Council, which would encourage the private sector to upgrade labour skills.

“Looking at the skills that the industrial sector needs most, at the top of the top 3 skills are technical skills, followed by digital skills and data analytics skills.”

Thanawat Polvichai, the President and Chief Economic Advisor of the Thailand Trade Representative Office, he said that the labor force sees that the Thai economy has recovered, but it is still fragile due to insufficient income to pay for living expenses. There is still a continuous household debt problem, resulting in an increase in household debt value this year, reaching a maximum of 272,528.15 baht, the highest in the past 14 years.”

Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce (UTCC) and chief adviser of the UTCC Centre for Economic and Business Forecasting, said that although the Thai economy has recovered, it is still vulnerable due to insufficient income to cover the cost of living. Household debt remains problematic and has resulted in household debt reaching a high of 272,528.15 baht this year, the highest in the last 14 years.”

However, the Bank of Thailand has found that the household debt-to-GDP ratio has decreased from 90 per cent to 86 per cent, and it is expected to decrease further as the Thai economy continues to recover strongly. Moreover, the proportion of informal debt in the labour sector has continuously decreased to a record low of 20.2 per cent in the last 14 years, mainly due to the increased availability of quick loan products from financial institutions.

As for this year’s labour day, it is expected to be more active than the previous year due to the increased income from the minimum wage hike at the end of last year, which is estimated to have a ripple effect of 2.067.2 billion baht, an increase of 29.8 per cent over the previous four-year period.