Shadow of insecurity over Thai job force in the current economic climate

Millions of Thai workers are facing both short-term and longer-term threats to their jobs that require greater efforts from the government, businesses and labor representatives themselves.

The oil crisis triggered by the US-Israel war against Iran poses immediate threats for both businesses and labor, as skyrocketing oil prices are driving up production costs and the cost of living. Workers have been worrying about job security amid increasing risks of being laid off if businesses try to cut costs during the global oil shock and economic slowdown.

“The spike in oil prices poses risks to both entrepreneurs and their employees,” says Lae Dilokvidhyarat, a prominent economist at Chulalongkorn University, who specialises in labor issues. “Those who are laid off by their employers could at least get compensation. My greatest concern, however, is for those who lose their jobs as a result of their employers going bankrupt. These workers may not get compensation from their employers,” Lae notes.

Those who remain employed are also feeling the pressure, as their purchasing power is eroded by higher inflation—businesses are raising the cost of products and services.

The Bank of Thailand recently projected a rise in the inflation rate to 2.9 per cent this year, up from 0.5 per cent in the first quarter. Despite the central bank’s optimism that inflation will be temporary due to supply-side issues, the unresolved Iran war brings significant uncertainty. So far, there is no sign the conflict in the Middle East will end soon, and the prolonged tension has led to the closure of the Strait of Hormuz, a vital channel for oil and gas transit from Gulf countries to the world.

Demand for higher wages

“The minimum wage has to increase to cover the rising cost of living,” says Lae. Unlike business partnerships that share profits and losses, workers sell their labor to businesses in exchange for wages, Lae points out. Trade unions have demanded that the government and employers agree to increase the daily minimum wage to 712 baht, arguing that wages over the past 10 years had increased only marginally—by 33 per cent. They referenced the minimum wage of 300 baht in 2015 and 400 baht in 2025, with only some provinces receiving the higher rate.

Thai workers have also repeatedly called for the government to ratify the International Labour Organization (ILO) Convention No. 87 on Freedom of Association and Protection of the Right to Organise and Convention No. 98 on the Right to Organise and Collective Bargaining, which guarantee the right to form trade unions and bargain collectively.

Low labor productivity

Thailand’s labor productivity in 2025 stood at US$18.5, ranking 104th globally, according to ILO data on employee productivity per hour. By comparison, Singapore ranked sixth with US$96.9, and Luxembourg held the top spot at US$166.1. Labor productivity, which measures economic output per unit of labor, is a primary indicator of an economy’s efficiency, long-term growth potential, and standard of living. It reflects how effectively workers, technology, machinery and skills are combined to create value.

Employers often argue that minimum wage should be tied solely to labor productivity rather than mandated, but Lae disagrees. He highlights that many Thai companies rely too heavily on unskilled labor—especially from neighboring countries—so they fail to upgrade their industries or climb the ladder of high-value chains in global manufacturing. The lack of effective training courses and investment has hindered coordination between the public and private sectors to create a large pool of skilled labor.

“We have not seen significant improvement in labor skills to catch up with rapid technology change over the past 10 years,” Lae points out. Most training courses are available only for the unemployed, which is not very helpful. Lae suggests that human development should be implemented throughout the course of a worker’s job life.

However, many firms are reluctant to invest in upskilling or allow their employees to join public training programs due to concerns that workers might leave for other companies, saddling them with the cost. The government needs to create an incentive system or pay compensation to companies investing in human resources, according to Lae.

Lack of legal protection

In the gig economy, where social and business platforms such as food delivery, parcel delivery and ride-hailing services are rapidly emerging, the relationship between platforms and workers is unclear—unlike the traditional employer-employee setup. Existing labor law governs the relationship between employers and employees to ensure workers’ rights are protected, but it does not cover gig workers, as platform owners claim they are not employers.

“Thailand needs to introduce new laws to protect these workers,” says Lae. A recent study—a Fairwork Thailand research project—shows poor ratings for digital platforms in terms of fair treatment of workers, who are often called partners. It was found that none of the platforms scored higher than 2 out of 10 points for fairness. The main issues include remuneration falling below the minimum wage once actual costs are deducted; unsafe working conditions; algorithmic management with no effective appeal mechanism; and the lack of formal rights for workers to organize and bargain collectively.

The Fairwork Thailand research project, conducted by the Innovation for Social Solidarity and Inclusive Economy in Asia Research Group at the Institute of Asian Studies, Chulalongkorn University, in collaboration with the Oxford Internet Institute, University of Oxford, released Thailand’s first report assessing the fairness of digital platforms on April 6, 2026. The assessment is based on an international standard framework used in 41 countries worldwide and evaluates seven digital economy platforms operating in the Bangkok area: BeNeat, inDrive, LINE MAN, Bolt, Grab, ShopeeFood, and Robinhood. The evaluation is based on five key principles: fair pay, fair conditions, fair contracts, fair management and fair representation, with a total possible score of 10 points.

Sustainability of pension and social security fund

Pensioners do not have enough income after retirement, partly due to the limited contributions and low investment returns of the social security fund—less than 5 per cent over the past 20 years. The Thai social security fund faces questions not only about its financial sustainability but also the public’s confidence in its management, according to the Thailand Development Research Institute.

Without drastic changes, projections indicate the social fund may not be able to meet its obligations in the next 20–30 years due to an aging population, low birth rate and changes in the labor market, with more freelancers and gig workers, according to the research house.