We’re used to the big salaries in most of European countries, but it seems that even Chinese manpower is too expensive for some companies. That is why more and more of them are thinking about the transfer of production facilities to other Asian countries Thailand. So meet the most successful examples:
Trina Solar Ltd and Jinko Solar Holding Co Ltd, two biggest companies representing the sector of green energy in China is moving to South-East Asia. The reason is simple: manpower is much cheaper and the facilities will be located near the target markets that will increase amount of sales.
Pharmaceutical area shows one of the highest development levels among all representatives of the Thai labor market. Chemistry factories give the brands and ability to increase the profits by the separation of the research facilities (most of them situated in Europe or North America) and the manufacturing itself.
What is the key of so rapid success ?
Unemployment level in most of Asian countries is pretty low, but Thailand holds the record. That is why where are going to discover the reasons of this phenomenon. And, as far as you may guess, most of them caused by the domestic policy. So, let’s start!
The first reason is structural problems of the labor market. Approximately 40% of the population is involved in agriculture (source : Thai ministry of Agriculture and cooperatives. This kind of job does not require special skills, and it is the main reason of its popularity.
Unemployment insurance in Thailand does not exist. It means that people cannot stay without job for a long time. According to the statistics even part-time workers are counted as employed.
There are also issues in the agricultural sector. Your employment depends not on your ability to work, but on your ability to pay the bills. So, you may get your pocket money and help father on the farm for several hours a week and the government define you as employed person.
Fertility rate in Thailand is extremely low and it continues to decrease. Nation is aging, so there are not so much new members of the workforce, while approximately 15 percent of the populations are defined as pensioners.
Foreign workers from neighbor countries are not able to get good job due to language barrier. It means that there is enough of low-cost manpower involved in agricultural sector so the citizens may spend time on education to fill the better vacancy.
Government policy in the sector of employment does not care much about the shade economy, because even taxi-driver or street vendor is counted as self-employed person. The most of taxes depend on the payments, so till you pay the rent and bills, country does not really care about your job.
And what about European labor market?
So may some of this factors be approached in the Europe? We had a short interview with the representative of the European Vocational Training Association to find them. According to his commentary, Europe is unable to implement law that will disable the unemployment insurance because of risk of protests, but taxes that are depending on the payments instead of salary is one of the best ways to fight the “shadow economy”.