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Low Minimum Wage Causing A Worker Shortage

Source: Vientiane Times

The Lao Federation of Trade Unions (LFTU) has called on businesses, including garment factories, to pay workers the increased minimum wage, which rises from 1,100,000 kip to 1,500,000 kip per month this year.

The federation is concerned that Laos will face a shortage of skilled workers if companies do not pay the higher minimum wage, with many people already heading back to jobs in Thailand.

Most of them are skilled and can earn more money in Thailand, where the minimum wage is higher than in Laos.

A senior Federation official, who asked not to be named, told Vientiane Times that the return of workers to Laos from Thailand when they were laid off from their jobs because of the pandemic had raised hopes that they would look for jobs in Laos.

But the cost of living is higher in Laos and the minimum wage did not meet workers’ basic needs.
Meanwhile, employers in Thailand have an increasing need for skilled workers and offer decent wages.

Companies in Laos are suffering from a shortage of workers and there is a lack of accurate data around the situation which has given rise to issues such as informality in the recruitment process and a lack of employment protection.

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At the same time there is a lack of job market indicators on employment opportunities and unemployment, the official said.

More than 50 percent of people who returned to Laos from Thailand went back in January and it is thought that number may now have reached 70 percent and that about 200,000 people have returned.

“If we don’t do something about the wages offered in Laos, it’s likely that everyone who returned will head back to Thailand,” the official added.

The Thai government has relaxed restrictions in relation to Covid-19, and undocumented migrant workers will be treated more leniently.

Statistics from the Ministry of Labour and Social Welfare indicate that more than 246,000 workers returned to Laos from Thailand since the start of the pandemic when large numbers of people were laid off, but that 150,000 skilled workers returned to Thailand in January this year.

A man from Savannakhet province said he had worked in a factory in Thailand for several years and earned 15,000 baht a month. This amount was enough for him to send some money to his parents and to pay his own expenses, because of the low cost of living in Thailand.

He was laid off from his job when the pandemic hit and returned to Savannakhet where he found work with a company at a starting salary of 1 million kip. He worked for three months and then left because the salary was not enough for him to live on.

Then he got a call from his former employer in Thailand, asking him to return.

Lao nationals must get work permits and passports from labour officials before they can legally work in Thailand.