Thai youth unemployment at new high

Thai youth unemployment at new high

Pandemic restrictions hamper the entire labor market, with possible longer-term consequences, says ILO report

Job seekers look at a job board at a job fair held last year in Bitec. (Photo: Wichan Charoenkiatpakul)

Unemployment among young men and women in Thailand has reached an unprecedented level in recent years due to the impact of the Covid-19 pandemic, according to the International Labor Organization (ILO).

Youth employment fell 7% in the first quarter of 2021 compared to the fourth quarter of 2019, the United Nations agency said in its Thailand labor market update released this week. The youth unemployment rate rose 3 percentage points for both men and women, peaking at 6% and 8%, respectively.

The pandemic-related restrictions particularly affected employment in small establishments with fewer than 50 workers, the report said. Youth employment in these establishments suffered the most, falling by 18% for young men and 24% for young women.

“If small establishments were one of the channels for young people to get jobs, the channel has shrunk considerably,” the report notes.

“The impact of Covid-19 on the Thai economy has hit young people and small establishments particularly hard,” said Graeme Buckley, ILO country director for Thailand, Cambodia and Laos.

“Targeted responses focused on key sectors and segments of the workforce are vital for the recovery, as are continued efforts to ensure that everyone receives immunizations, including migrant workers. “

Between the fourth quarter of 2019 and the first quarter of 2021, the total number of working hours fell by 7%, a drop in full-time equivalent employment of 2 million across the entire working population, said the ‘ILO. A fairly strong recovery in working time and employment in the last half of 2020 was reversed in the first quarter of 2021 due to the re-emerging waves of the pandemic.

The impact of the pandemic on Thailand throughout 2021 is of looming concern for the workforce as a whole. The cumulative and prolonged negative impact of pandemic-related restrictions on income, employment, working hours and productivity is a serious concern.

In the third quarter, the severity of the restrictions linked to Covid-19 was equivalent to that of the second quarter of 2020. We could therefore expect a socio-economic shock of a similar magnitude to that observed in the second quarter of 2020, has t -he adds.

The Covid crisis adds to longer-term economic and employment challenges in Thailand and may have reversed any recent progress, according to the ILO. For example, wage inequality increased year over year in the second quarter of 2020. Wages increased at the top of the distribution, while the low wage ratio trended upward on a quarterly basis in 2020.

In the second quarter of 2021, the sectors most affected were accommodation and catering (61% of the added value observed in the fourth quarter of 2019), transport and warehousing (74%) and wholesale and retail trade (95%). The three sectors accounted for 30% of non-agricultural GDP in 2019.

Other sectors either recovered, such as agriculture and manufacturing, or continued to expand during the pandemic, such as construction, information and communications technology and real estate. Thus, there are temporary intersectoral imbalances.

“If the socio-economic crisis continues, any existing intersectoral mismatch in the labor market may worsen and become structurally entrenched,” says the ILO report.

While employment has started to grow this year in many sectors, it has been accompanied by a decline in labor productivity. Sectors that have experienced positive growth in both employment and labor productivity include finance and insurance, education and construction. The agricultural sector experienced a notable decline in employment and productivity between the fourth quarter of 2019 and the first quarter of 2021.

The incidence of part-time employment increased in almost all industries over the same period, including professional, scientific and technical activities (by 23 percentage points), manufacturing (up 20 points) and information and communication (up 19 points). Thus, while employment has been able to be maintained, the volume of work in terms of hours has weakened, according to the ILO.

Despite difficult conditions, the overall response of workers in the first year of the pandemic was to stay in the workforce. This was perhaps supported by the job protection measures that were put in place in 2020.

With the gradual easing of health-related restrictions, increasing vaccination rates and the announced easing of cross-border mobility in November 2021, a slow and uneven recovery could be expected in the last quarter of 2021 and into 2022, concludes the report.

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