When the business cycle was disrupted by the COVID-19 crisis due to government lockdown measures aimed at controlling the disease, from March to April 2020, nearly every production sector saw a reduction in employment by over 1 million people. It is estimated that after the lockdown was lifted, there were 3.2 million unemployed individuals, not including 550,000 new graduates.

It cannot be denied that... the main cause of unemployment and job loss is undoubtedly the COVID-19 virus, the primary culprit that has shaken the employment base worldwide! The impact of COVID-19 led to a ban on economic activities (lockdown), severing the business cycle! Particularly, businesses related to tourism suffered significant income loss, lack of working capital, and inability to access credit sources, necessitating workforce reductions.

  • Employment situation before and during the first three months of 2020

According to a survey by the National Statistical Office, in the last quarter of 2019, before COVID-19 spread in Thailand, the situation of “employment” in Thailand had not changed significantly, though there were concerns regarding “employment in the agricultural sector” due to drought and efforts to enhance competitiveness and reduce costs from being “disrupted” by digital technology and disruption technology.

During the early stages of the COVID-19 outbreak from January to March, Thailand's labor market was not yet affected, with overall employment increasing (1.2%) during January-February, but it began to decline sharply in April by 3%. The number of employed individuals (both with and without income) who were not working rose significantly to 2.9 million.

In March-April, nearly every production sector saw employment drop by over 1 million people. These workers were not unemployed but were on leave or waiting for work from businesses that reduced working hours or temporarily closed. These workers had to return to the agricultural sector during March-April, which still served as a “safety net” for labor.

According to the Thailand Labor Force Survey (TDRI), workers who still had jobs but were not working during the COVID-19 outbreak can be divided into two groups: those with income and those without. Together, they total 2.9 million people. The first group, workers with income, numbered 481,000 in April, while the second group, those with permanent positions but unable to work, was significantly larger at around 2.42 million.

It is predicted that Real GDP Growth will decline (on average) by 8.10% in 2020, with the second quarter expected to contract by 11%, and the third and fourth quarters averaging a contraction of 9.82%.

Therefore, if Real GDP decreases, it will lead to an increase in unemployment. However, analysis of the number of unemployed through the OLS model indicates that in 2020, there will be as many as 3.26 million unemployed individuals.

  • Unemployed individuals in the second half of the year are estimated to be around 3.2 million.

According to the National Statistical Office, in 2019, the population aged 15 and older was 56.49 million, with 37.77 million employed, including 12 million in agriculture, 6 million in industry, and 18 million in services.

While the agricultural sector employed about 12 million people, it was not as severely affected by COVID-19 as other sectors. The manufacturing industry, employing 6 million, faced significant impacts, with exports expected to decline by 8% due to the contraction of foreign markets from COVID-19, leading to layoffs, reduced production capacity, and exacerbated by a strong baht, creating a crisis that is concerning for both employers and employees.

After the announcement to open the economic areas in June, businesses began to gradually reopen. However, due to weak purchasing power! Many consumers remained concerned about future income stability and/or the risk of infection. Prior estimates before the lockdown was lifted indicated that there would be 8.4 to 9.0 million unemployed individuals.

Currently, after the lockdown measures were eased, it is estimated that there are about 3.2 million unemployed individuals (similar to the TDRI's estimates from the OLS model). Among them, 1.44 million have applied for unemployment benefits under Section 33 at the beginning of June. This figure does not include 550,000 new graduates!

SOURCE : www.bangkokbiznews.com