Dr. Takahito NIWA from Tohoku University gave a presentation about his PhD work At the spring meeting of the 2013 Association of Japanese Geographers (AJG). His presentation was entitled “Characteristics of local labor markets in Thailand: Case studies of Northeastern and Eastern Thailand”. There have been many questions and concerns about the involvement of Japanese business in the local economy and development of labor markets within the rapidly changing global economy. We are grateful for the inspiring discussion that shed light on another piece of the large mosaic of the spaces of international economy and management. The presentation was summarized by the author as follows:
Following World War II, Thailand achieved economic development as its industrial structure shifted from agricultural to manufacturing through export-oriented industrialization. Japanese investment accounts for one-third of all foreign direct investment in Thailand, and this investment played an important role in Thailand’s industrialization. This research reveals disparities between labor market conditions in the BMR (Bangkok metropolitan region) and those in the rural region by analyzing behavior patterns of Thai workers at industrial estates in the BMR where Japanese manufacturing companies are concentrated, and behavior patterns of Thai workers in urban areas of Northeastern Thailand. Two study areas are examined. The first area is the Amata Nakorn Industrial Estate. This estate is Thailand’s largest industrial estate, and can be regarded as an industrial center due its concentration of Japanese manufacturing companies. The investigation targeted 360 workers from this area. The second area comprises Khon Kaen City and Udon Thani City in Northeastern Thailand. Both cities can be said to be economic centers of northeast Thailand. The investigation targeted 752 workers from this area. Two study areas are symbolic of Thailand’s regional disparity. However, it should be noted that the investigation only examines workers, and focuses particularly on their career courses.
In the case of Amata Nakorn Industrial Estate, the majority of the unskilled workforce originates from Northeastern Thailand, and the majority of the core workforce from the internal department originates from the BMR area, in particular Bangkok City. In addition, whereas the majority of the core workforce is made up of university graduates, the unskilled workers are high school graduates and graduates of vocational training schools, therefore gaps in terms of academic background are extreme. Differences in work consciousness according to academic background confirmed that workers with better academic backgrounds are more inclined to develop their careers by transferring jobs. However, in reality many unskilled workers transferred jobs, and were able to increase their salary in doing so.
In the case of Khon Kaen and Udon Thani, the career courses of workers varied according to their spatial mobility. Workers who have experienced transfers outside of the provinces for work or education, and workers who transfer in from the BMR, are more likely to gain positions as white-collar workers (core workforce), regardless of academic background, than workers who have never transferred outside of the provinces. This can be attributed to the fact that experience of education or work in the BMR is regarded highly within the labor market. In addition, in terms of differences in work consciousness according to academic background, workers with better academic backgrounds tend to be more inclined to develop their careers by transferring jobs, as was the case in Amata Nakorn. From the above, we can see that local-oriented workers value continuous service in their home province over the advancement of their careers.
The inclination for workers with better academic backgrounds to develop their careers through job transfers, and the dependence on Bangkok City for the core workforce, are aspects of labor market structure shared by both locations. Moreover, wages in the BMR are increasing due to the supply and demand of labor, and this phenomenon is contributing to the flow of unskilled workers.
Upon consideration of the above findings, it may be possible for Japanese manufacturing companies to resolve the problem of not being able to secure cheap human resources and the high turnover rates amongst Thai workers by advancing into rural regions. This is because the difficulties associated with securing the core workforce are roughly the same in rural regions as they are in the BMR. Moreover, by securing Thai workers in rural regions, it is possible to encourage the achievement of work-life balance through the approximation of workplace and home.
However, it is also necessary to actively make use of workforces in Cambodia, Laos and Myanmar as the Thai economy is expected to experience rises in labor costs nationwide. At that time, it will be necessary to examine the use of international labor migration as it expands within the framework of the AEC (Asian Economic Community). For further information contact Dr. Niwa by e-mail [email protected]