IT’S no secret that building sites and factories in Thailand have long been magnets for cheap labor from neighboring countries. More recently, non-Thais have also been filling jobs like maids, nannies, mechanics and gas station attendants. Now the hotel and catering industry has joined this unstoppable trend, employing people from the Philippines, Vietnam, India and Nepal to fill positions Thais no longer want, at least at the salaries offered. It’s a convenient arrangement, with foreigners happy to be paid this country’s official minimum wage, and sometimes less, because it’s more than they could expect back home. And their Thai employers are happy because it translates as lower labor costs. The government may be happy too because it helps to keep down the cost of living.
It is entirely probable that some of these foreign workers are not legal, but so far no one seems to be unduly worried. It’s going to happen anyway, once the Association of Southeast Asian Nations (ASEAN) introduces the free flow of labor amongst its members, apparently sometime after 2015.
So, until and when that occurs, many businesses requiring unskilled labor will only be able to function effectively by employing these foreign workers.
Interestingly, Thailand’s booming economy and the shortage of skilled workers have pushed up salaries to the point where companies might start considering other non-Thai employees. New graduates command a minimum starting salary of 20,000 baht per month, and the rate for more experienced personnel increases rapidly thereafter. Pay of 80,000 baht is not uncommon for junior executives, 100,000 baht for middle executives, and so on. Clearly, remuneration at this level impinges on profitability and, in the case of companies operating in international markets, competiveness.
There is an irony in all this. Vast pools of unemployed and highly skilled labor now languish in Europe and North America. Despite the high cost of living there, jobs in certain towns and cities are so few and far between that people are prepared to accept salaries considerably below their real worth. A recent British TV documentary about the high levels of unemployment in the Welsh town of Merthyr Tydfil revealed the case of a well-educated 30-year-old family man who was pleased to secure a job at a salary equivalent to 25,000 baht a month (at present UK pound to Thai baht exchange rates), even though it involved a lengthy daily journey to the city of Cardiff. He thought he was fortunate.
Solving Europe’s employment problems is not the responsibility of Thailand, of course. But it is equally true that this country’s spiraling labor costs could imperil its progress. ASEAN may be able to fill the employment gap to a certain extent, but Thailand may well have to look farther afield for more qualified and experienced workers to continue its economic development.
It is entirely probable that some of these foreign workers are not legal, but so far no one seems to be unduly worried. It’s going to happen anyway, once the Association of Southeast Asian Nations (ASEAN) introduces the free flow of labor amongst its members, apparently sometime after 2015.
So, until and when that occurs, many businesses requiring unskilled labor will only be able to function effectively by employing these foreign workers.
Interestingly, Thailand’s booming economy and the shortage of skilled workers have pushed up salaries to the point where companies might start considering other non-Thai employees. New graduates command a minimum starting salary of 20,000 baht per month, and the rate for more experienced personnel increases rapidly thereafter. Pay of 80,000 baht is not uncommon for junior executives, 100,000 baht for middle executives, and so on. Clearly, remuneration at this level impinges on profitability and, in the case of companies operating in international markets, competiveness.
There is an irony in all this. Vast pools of unemployed and highly skilled labor now languish in Europe and North America. Despite the high cost of living there, jobs in certain towns and cities are so few and far between that people are prepared to accept salaries considerably below their real worth. A recent British TV documentary about the high levels of unemployment in the Welsh town of Merthyr Tydfil revealed the case of a well-educated 30-year-old family man who was pleased to secure a job at a salary equivalent to 25,000 baht a month (at present UK pound to Thai baht exchange rates), even though it involved a lengthy daily journey to the city of Cardiff. He thought he was fortunate.
Solving Europe’s employment problems is not the responsibility of Thailand, of course. But it is equally true that this country’s spiraling labor costs could imperil its progress. ASEAN may be able to fill the employment gap to a certain extent, but Thailand may well have to look farther afield for more qualified and experienced workers to continue its economic development.
