Low Wages in Thailand Despite Rapid Growth

Foreign firms like country's laissez faire rules

AS Thailand's economy kicks into high gear, it has become a magnet for foreign investment. But critics warn that if this country is to compete with the stronger Asian Tigers, the newly elected government will have to improve real income for working Thai people. Over the past 30 years, Thailand's economy has grown far faster than that of other Southeast Asian countries, such as Vietnam and Burma. The country has become an economic powerhouse, with Thai businesspeople now investing widely in the region. Since 1993, the Thai economy has averaged 8 percent annual growth, according to World Bank statistics. But the country can no longer rely on industries such as garments and textiles for economic growth. These have already begun an exodus to neighboring, low-wage countries. So the Thai government is encouraging a shift to more sophisticated, value-added industries. The Thai economy is successfully making the transition to ''medium-tech,'' according to Peter Gajewski, an economist for Development Alternatives Inc., a Bangkok consulting firm. In the past five years, Thailand has excelled in industries such as gem cutting, seafood production, and computer assembly. But the government hasn't paid sufficient attention to the needs of ordinary Thais, says Mr. Gajewski. He wants the government to put far more money into education, health care, and infrastructure. ''Government policies have clearly been laissez faire,'' he says. Companies face almost no government restrictions on labor conditions or the environment. ''So investors have an opportunity to reap substantial profits without bearing the social costs,'' he adds. A new era of expansion Government planners and economists say they hope hi-tech industries will drive a new era of economic expansion and help alleviate social inequities. They point to investments by Seagate Technology, a disk-drives maker based in Scotts Valley, Calif. Seagate opened its first plant in Thailand in 1983 with only 50 workers. Today, it employs 26,000 in five plants and has become the country's largest private employer and largest exporter. Wages and benefits surpass those of local manufacturers, Seagate officials say. Seagate invests here because of low labor costs, tax incentives, and support from government agencies, says Ron Verdoorn, Seagate's executive vice president for the Storage Products Group. He expects the new Thai government, elected in July, to continue its pro-business stance. But critics charge that Seagate engages in dangerous manufacturing processes that harm Thai workers. Orapun Metadilogkul, president of the Occupational and Environmental Medicine Association of Thailand, tested Seagate workers in 1991 and found levels of lead in their blood said to be dangerous. Toxic work environment Workers soldering and working with solvents showed symptoms of toxic poisoning, according to Dr. Orapun. Since that time, she has treated more than 200 Seagate workers for occupational illnesses and says the dangerous conditions continue today in at least one Seagate plant. Seagate has failed to accept any responsibility, Orapun says. Lee Kuhre, Seagate senior director for Environmental Health and Safety, says his company has proved definitively that employees don't suffer from lead poisoning as a result of their work. ''We have tested workers in every location in the factory,'' he says. ''None have levels that exceed OSHA.'' The US Occupational Safety and Health Administration sets more stringent guidelines for lead exposure than Thai regulations do. The dispute is currently being contested in Thai workers' compensation courts. Orapun says workers with few resources have little chance of success in court. Nevertheless Seagate and similar hi-tech companies remain popular places of employment. Thais ''line up everyday to apply for work,'' says one Seagate official. ''We can't hire them all.'' Driven by investments from companies such as Seagate, the Thai economy should continue growing at about 8 percent a year for the next five years, Gajewski says. Thailand ''could become another Asian Tiger,'' he says. ''It's coming close to that now in almost every way.'' But if Thailand doesn't reduce poverty and increase workers' living standards, he says, ''the costs are going to be higher and higher each year in terms of environmental degradation, income distribution, and just overall congestion of the economy.''

You've read  of  free articles. Subscribe to continue.
QR Code to Low Wages in Thailand Despite Rapid Growth
Read this article in
QR Code to Subscription page
Start your subscription today