Thailand Unempoyment Rate (in %)

0
7 1 973 975 977 979 981 983 985 98 7 989 99 1 99 3 99 5 99 7 999 00 1 003 005 007 009 011 013 015
19 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2

Sources:

https://www.bbc.com/news/world-asia-15641745

https://deepblue.lib.umich.edu/bitstream/handle/2027.42/40024/wp638.pdf?sequence=3

http://www.th4u.com/thai_history.htm

https://www.worldatlas.com/webimage/countrys/asia/thailand/thtimeln2.htm#page

http://www.worldbank.org/en/country/thailand/overview

https://www.worldatlas.com/webimage/countrys/asia/thailand/thtimeln3.htm#page

https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG
https://www.bis.org/publ/bppdf/bispap89y.pdf
 The unstable inflation rates from 1980-1990 were results of changing major structural
adjustments and economic reforms. In 1986 the rate lowered to 3.5 % because it is n this year
that the government revised the tax code to encourage more labor-intensive manufacturing.
Although the reforms of the government were strongly opposed by political parties, business
groups, and most significantly, the military, they were still implemented. As a result, these
reforms under Prem was a stable and restructured economy. Because of this stable economy
Thailand was able to attract a lot of investors between 1987-1988 (5.77% - 1.89%) which
resulted in the rapid decrease of unemployment rate. In 1997 Asian financial crisis, the baht fell
sharply, causing bankruptcies and unemployment. Thailand shifted from a dollar-pegged fixed
currency policy to a floating exchange system which resulted in the devaluation of the baht. The
Thai economy melted down after the shock floating of the baht, a move that sent the currency
spiraling downward by 30 percent as currency speculators attacked. Thailand’s booming
economy came to a halt amid massive layoffs in finance, real estate, and construction that
resulted in huge numbers of workers returning to their villages in the countryside and 600,0000
foreign workers being sent back to their home countries. In 2010 employment expanded by 0.9
percent in response to a strong economic condition, characterized by a more competitive
environment for labor recruitment across economic sectors. Employment in trade and service
sectors registered a growth rate of 3.1 percent and 2.9 percent, respectively. However,
employment in the manufacturing sector contracted despite a strong production growth in the
export-oriented sectors such as electronics and vehicles. This was partly due to a shift in labor
from the manufacturing sector to trade, service, and agricultural sectors, as well as more labor
becoming self-employed. Tight labor market condition worsened in 2010, reflected by a rise in
the ratio of vacancy to unemployment rate from 5.7 percent in 2009 to 10.5 percent in 2010. In
2016, one of the reasons why Thailand had low unemployment of 0.69% during this year is that
the government do not give incentives to those jobless, because of that people tend to seek other
jobs. Their economy comprises of 64% in the informal sectors and 40% in the agriculture. This
shows that most of the people included in the workforce are not highly paid. Another factor is the
low fertility rate of this country, which results to many older people above 60. Then there are
more people retiring and therefore excluded from the workforce thus reducing the
unemployment. With regards to the relationship of the inflation rate to unemployment rate, both
of them are very low, which is contrary to what have been previously discussed that low
unemployment means high income then high income means high demand and high demand
means high inflation. The problem is that most of the people in the work force are not highly
paid which means income is still low. And there is only few people included in the workforce
because some are already retirees.

Conclusion:

Thailand have been having low unemployment rates since 1971 because of some major
factors including the revised code which encourage more labor-intensive manufacturing during
1986. Another reason is during the reforms under Prem results to a stable economy during 1987-
1988 due to this stabilized economy, many investors were attracted which resulted to rapid
decrease of unemployment. In the present years, reasons for the low unemployment rate is the
lack of incentives to those people who don’t have jobs, which will force them to look for jobs or
they will do something on their own. Another is that the informal sectors absorbed this workers
who cannot always look for job. Because of this the workforce of Thailand is now composed of
64% in the informal sector and the rest is in agriculture. Thailand have a strong economic
conditions during the past few years up to present. Their highest unemployment rate so far was
5.77% which is considered as full employment according to Schiller’s theory.