ILO’s Response to Job Losses

With more than 17,000 jobs having been lost in February so far, making 26,000 this year with another 132,000 factory jobs already scheduled to be lost, it is clear that Thailand is facing a severe economic crisis. Total job losses will increase as suppliers and other stakeholders suffer when these factories contract or close down. As I have written before, Thailand is particularly vulnerable to economic crisis because of its openness to the world and its reliance on exports and tourism.

The International Labour Organization (ILO) has outlined the principal problems: “Of concern for countries were sectors dependent on exports and remittances and the knock on effect of decline to other economic sectors and to the most vulnerable and poorest. Potential loss of jobs and threats to decent work affecting many millions in the region was the central preoccupation of forum participants. Capacity to address this through stimulus packages was particularly worrying in countries with limited fiscal space or reserves to call upon.”

Some urgent policy areas were also identified:

§        Protecting and supporting decent jobs;

§        Collective bargaining and social dialogue particularly in negotiating flexible hours, wages, temporary lay-offs and severance packages;

§        Rolling out quickly infrastructure and labour-intensive public works projects, to keep men and women in work, particularly those retrenched;

§        Enterprise support measures including access to credit to focus particularly on small and medium sized enterprises (SMEs) and entrepreneurs.

§        Targeting support to specific sectors such as the rural and agricultural economy, and for vulnerable groups of workers – international and internal migrants, informal sector workers, women and young people;

§        Social security and social protection systems to be expanded to support vulnerable groups and increase disposable income levels;

§        International and regional support to include funding for developing countries and easing of conditionality in funding from international financial institutions:

The government has, to date, organized some job preservation schemes and suggested that support for SMEs and entrepreneurs will be forthcoming at some stage. A lot of money is simply being wasted for what appear to be political reasons. Few governments around the world inspire much confidence in their ability to deal with the crisis at the moment, so at least the quisling is not alone in that regard.

ILO on Job Losses and Poverty

The International Labour Organization (ILO) has issued a new report which is rather more pessimistic about jobs in 2009. In 2008, the global unemployment rate rose from 5.7% to 6.0% – that’s about 190 million people, 76 million of them young people. Depending on how the current economic crisis develops, another 50 million jobs could be lost worldwide and 200 million people returned to poverty (that will be 1.4 billion working poor).

To combat rising unemployment and rising poverty, the ILO recommends governments should:

i) wider coverage of unemployment benefits and insurance schemes, re-skilling redundant workers and protecting pensions from devastating declines in financial markets;

ii) public investment in infrastructure and housing, community infrastructure and green jobs, including through emergency public works;

iii) support to small and medium enterprises;

iv) social dialogue at enterprise, sectoral and national levels.*

The report deals in the regional rather than national level but some of the comments about ‘Southeast Asia and the Pacific’ are clearly directly relevant to Thailand:

In recent years South-East Asia and the Pacific has profited through trade and other economic linkages from the economic boom in China and India, and the slowdown in these countries will have a negative impact in the region. Reliance in many countries in South-East Asia on manufacturing exports to industrialized economies, foreign direct investment, tourism revenues and remittances, makes this region highly vulnerable to a prolonged recession in the developed world. Economic growth in the region declined to 5.1 per cent in 2008, and is currently projected to decline to 4.2 per cent in 2009.

The employment-to-population rate decreased slightly between 1998 and 2008, by 0.4 percentage points; the decrease was larger for youth than for adults. The unemployment rate in 2008 increased to 5.7 per cent, from 5.5 per cent in 2007.

As a proportion of the employed, extreme working poverty more than halved during 1997-2007. In 2007, 16.4 per cent of the employed were counted among the extreme working poor, but 46.6 per cent were among the working poor. In other words 30.2 per cent of the employed survived on between USD 1.25 and USD 2 a day.

* The Abhisit government has promised to do some of these things, to a limited extent – it remains to be seen how much this actually materializes (and yes I did have another dream about being arrested in the middle of the night so nothing controversial today or for the next few days from me).