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Global trade slump hits Asian labor

Many factory workers in export-heavy economies like Thailand's have lost their jobs. With agricultural demand also down, farming has become a less reliable Plan B.

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In the past, the fertile Thai countryside served as a social safety net during hard times. Laid-off migrants like Visut would return to work in the fields and wait until factories began hiring again. But while a few workers have left Rayong, many are sticking around, at least until their money runs out.

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For most factory workers, going home is a last resort, says Lae Dilokvidhyarat, a labor economist at Chulalongkorn University in Bangkok. After several years away, migrant workers prefer urban lifestyles and want a better future for their children, not low-paid agrarian jobs that don't match their skills. "These people can't communicate with the buffaloes anymore," he says.

Moreover, farming isn't likely to pull Thailand out of its economic tailspin. Exports of farm goods, which spiked in value last year, have contracted in recent months. That means limited demand for laborers and less money flowing into the countryside.

"People are starting to go back to rural areas. But it's very different from the 1997 crisis because the agricultural sector was flourishing [then]. There isn't the capacity to absorb people laid off from industries," says Gwi-Yeop Son, the UN country chief in Bangkok.

During the last crisis, Thailand's devalued currency made its goods cheaper for overseas buyers. That spurred export growth, including of agricultural goods, that helped resuscitate its economy and provide jobs for millions of struggling workers. Exports of rice doubled in a decade to 10 million tons.

Now, a strong dollar is eroding the value of some Asian currencies. But even if exporters like Thailand did devalue, there's so little global demand for their goods that it probably wouldn't help, says Steve Kapsos, an economist at the International Labor Organization in Bangkok.

The glass that Visut made went to foreign-owned automakers in Rayong, which calls itself the "Detroit of the East." Over half of the 1.4 million cars and trucks produced here last year went abroad. But as sales slide, automakers like General Motors and Toyota are axing jobs and halting assembly lines, forcing suppliers to cut back.

Not all companies are shedding workers, though. Ford, which manufactures pickup trucks and SUVs under a joint venture with Mazda, says its 3,900 workforce is unchanged. It predicts a 20 percent drop in output from 175,000 units in 2008, when its plant ran at peak capacity. A new $500 million extension will begin producing fuel-efficient sedans early next year, says Dave Alden, president of Ford in Southeast Asia. "These are times when you do need to continue to invest. The business will come back," he says.

Mr. Sema, who became a union activist after losing his minimart in the 1997 crash, is also hopeful. "The people living in America, they buy something from Thailand ... When these people have no profit, they can't buy these things. So we wait for America to prosper," he says.