The effects of low skill immigration on the Thai labour market

Evidence of this belief is shown in an opinion survey conducted in late 2010 by the International Labour Organisation (ILO) Triangle Project on public attitudes towards migration and migrant workers. The survey found an alarming 89 per cent of the respondents agreeing that "Government policies to admit migrants should be more restrictive," and only 40 per cent believing that migrant workers make a net contribution to the economy. An earlier study in 2006 conducted by Assumption University commissioned by ILO/United Nations Development Fund for Women (UNIFEM) found most respondents did not believe that Thailand needs migrant workers to sustain its industrial and agricultural economy.

Do facts on the ground support these perceptions? Recent empirical evidence show them to be misperceptions. Opposition to the presence of migrant workers was likely fuelled by concern over the sharp increase in the number of migrant workers, which nearly doubled from 2004 to 2007. As of 2007, immigrants represented around 5 per cent of the country's workforce of 36 million. Most of them come from the Greater Mekong sub-region, with some 75 per cent from Burma and 12 per cent each from Cambodia and Laos. They are largely young and low-skilled, around three quarters of whom are unregistered or undocumented.

The presence of an increasing number of migrant workers - documented or undocumented - in key industries like construction, agriculture and fisheries indicate either a shortage of such workers locally, or cheaper foreign labour, or both. It also suggests that migrant workers benefit these industries and the economy on the whole. Martin (2007) and more recently Pholphirul, Rukumnuaykit and Kamlai (2010) estimate the contribution of migrant workers to Thailand's real GDP to be in the range of 0.75 to 1.25 per cent per annum. Given that the migrant workers constitute only 5 per cent of the country's workforce; their disproportionately low contribution to GDP reflects their lopsided presence in low-productivity industries.

It is common knowledge that the Thai economy is characterised by the coexistence of a capital-intensive formal sector and a large labour-intensive informal sector, which employs mostly low-skilled and temporary workers who are paid lower wages without fringe benefits or job security. The rapid increase in educational attainment of the Thai labour force means that younger Thais are turning away from the so-called "3D" jobs (dirty, dangerous and demeaning). The growing void has been filled by foreign workers, most of whom have less than a lower primary education (fewer than four years of formal schooling).

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