Thailand Economics -
Employment and Wages
Employment and Wages
The average annual rate of employment growth in the 1970s was 2.7 percent,
compared with 2.9 percent in labor force growth caused by rapid population
growth in the 1950s and 1960s. As a result, unemployment reached 1.7 million in
1985, which corresponded to an unemployment rate of around 6.3 percent.
Agriculture was the major employer with about 69 percent of total employment in
the mid-1980s, a decline from 84 percent in 1960. Between 1970 and 1983
manufacturing increased its share of the total employed labor force from 4.1
percent to 7.4 percent. Commerce increased from 1.6 percent to 8.7 percent, and
services from 7 percent to 10 percent during the same period.
The work force had gone through some structural changes in terms of age and sex.
The fastest growing age-group in the 1960s was eleven- to fourteen-year-olds. In
the 1980s, that age-group dropped as a result of a falling birth rate in the
early 1970s and increasing primary and secondary school enrollment. By the
mid-1980s, the fastest growing group in the work force was aged between twenty
and thirty, with increasing participation by females. The proportion of women
employed went from 66 percent in 1971 to around 70 percent by the mid-1980s.
Female employment was highest in commerce with 54 percent in 1979, followed by
50 percent in agriculture, 43 percent in industries, and 36 percent in services.
In terms of regional distribution, the North had the lowest rate of labor force
growth, with 3 percent between 1971 and 1985, followed by the Northeast, with
3.3 percent as a result of limited job opportunities and migration. Bangkok had
the highest labor force growth with 6.9 percent. Regional growth of the labor
force depended partly on the level of education. An increasing (although still
small) number of new entrants in the work force had received a higher education.
In 1971 the percentage of the total labor force that had an elementary education
was 90.2. This figure declined to 72.6 percent in 1985. For people with lower
and upper secondary education, the share went from 4.8 percent to 10.4 percent
during the same period. The percentage of the labor force with vocational
training jumped from 1.9 percent to 10.4 percent between 1971 and 1985. Yet
unemployment in Thailand for those with a college or vocational education rose
from 8.4 to 9 percent by the mid-1980s, mostly because of an average increase of
13.7 percent per year in the educated work force between 1977 and 1985.
The real wage rate between 1978 and 1985 remained the same for most of the
country, but in some regions, such as the North, it dropped from B1.81 per hour
to B1.66 (for value of the. Only in Bangkok did wages increase--from B3.64 to
B4.20--during the period.
Real wages were stagnant because minimum wage adjustments were not always
closely linked to inflation rates, and compliance with the minimum wage laws was
not observed by the various sectors of the economy and regions of the country.
Minimum wage laws were first introduced in April 1973 after the legalization of
unions in 1972. At the outset, the laws covered only Bangkok. They were
subsequently applied to the entire country, which was divided into three regions
with three different scales for various types of activities; agriculture and
government administration were exempted. By 1982 minimum wages in Bangkok had
been raised by 100 percent; those in other regions had been raised by 50 to 70
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