ABOUT THIS Perspective
Retirement in your 40s doesn't sound attractive when you don't have sufficient retirement benefits to meet your basic needs. This is a stark reality confronting many factory workers in Thailand.
Retirement in your 40s doesn’t sound attractive when you don’t have sufficient retirement benefits to meet your basic needs. This is a stark reality confronting many factory workers in Thailand.
Speaking to Bangkok-based researchers during a field work for the project on Inclusive Industrialization for ASEAN, the JJN team learned about the many struggles of production workers of Thailand’s electronics sector, especially as they age. The sector employs around 380,000 workers.
Why do production workers retire early and how does it affect their future?
The assembly and testing of electronic components involves considerable use of chemicals, including solvents, rosin-based fumes, and electric current. Some international lead firms’ supplier factories are certified for standards of occupational health and safety management, such as OHSAS 18001, and run medical surveillance programs. However, it is unclear whether or how manufacturers, assemblers, or lead firms invest in measures preventing health issues that arise in the long run, such as reduced fertility, chronic respiratory problems, or lasting damage to the nervous system.
In addition, jobs in the assembly line of parts and components or in testing manufactured goods are both repetitive and strenuous. These characteristics would be less threatening if the working hours allowed sufficient time to rest limbs, back, eyes, ears and lungs of the workers. Production work is widely based on a remuneration model that discourages acceptable working hours and recovery breaks on a typical day, as well as during an average month.
It is also common for employers to pay a basic salary that leaves workers struggling to meet their minimum living expenses. A low basic salary also implies low pensions and retirement funds, if they exist at all. And as the hourly rate for overtime is 150 percent or higher than regular working hours under Thai labor law, workers have an incentive to work overtime.
Many of them have to retire before the formal retirement age due to health conditions. Some of them develop chronic and life-threatening diseases, such as cancer. These working conditions and occupational health hazards contribute to premature morbidity of workers.
There is little research on lifetime income and employment trajectories of workers in the electronics industry. However, some individual accounts demonstrate that workers resort to less productive and often informal employment 20 to 25 years before their actual retirement age because of their poor health induced by working on the production line. Their job-related injuries and health problems make them far less productive than their younger counterparts. Therefore, factory managers tend to replace middle-aged workers with younger ones. With a little savings from low paid work and the lack of enough social security schemes, the older employees sometimes need to return to work in the production line, but under worse conditions. When they are no longer employed as permanent workers, they might be “downgraded” to seasonal work in the production facility, leaving them with even less income security, as a trade union representative revealed during field work. Some workers become street vendors or open small shops, often in the informal sector where they cannot avail public social security schemes. Workers migrating from other regions may choose to return to their farming communities and work as day laborers.
All this happens against the backdrop of Thailand’s aging society. According to World Bank data (2016), 11 percent of Thais (7.5 million people) are 65 years or older. This number is estimated to increase to more than 25 percent (17 million) by 2040. This also implies that the working age population is estimated to decline by approximately 11 percent as a percentage of the total population by 2040. Interestingly, this decrease is more pronounced in Thailand than in other developing countries in East Asia and Pacific, including China.
What can help uplift aging workers in Thailand’s electronic sector?
Since most of the workers in the electronics sector have less access to both in-cash and in-kind benefits, it is difficult for them to make a living. To uplift these workers, all stakeholders need to rethink how to provide productive employment and social security benefits to them.
To improve the employability of workers, the employers can work with the Department of Skills Development (DSD) of the Ministry of Labor, providing relevant training programs. These training programs can help workers create their own income generating activities. In addition, access to financial assistance is important. The government should provide a fund to financially support micro-businesses and entrepreneurship.
With regards to income security in old age, there is a public pension scheme in place in Thailand, but the payouts are very modest for a majority, and personal savings for retirement are low. Monthly pensions may be as low as 600 to 1,000 baht a month ($17 to $28 in 2016), even after many decades working in a formal job. It is important for the government to explore the feasibility of a universal pension scheme. In order to provide a broader basis of payers for such a pension scheme, it may be inevitable to raise the state retirement age, as it is already explored in China or Taiwan, and encourage hiring of older workers in other occupations, such as in public transport.
Last but not least, health and safety in manufacturing should not be compromised, being a strain on productivity and worker well-being, as well as on the reputation of electronics firms. Maintaining a reputation is a good starting point for lead firms to improve existing medical programs in their suppliers’ factories, and gradually replace toxic substances with safer ones. In addition, the results of third-party audits on health hazards and working hours in the supplier factories should become more accessible to the public. This would credibly support electronics firms’ efforts to improve working conditions and long-term health for all production workers.
 This number excludes employment in electrical parts assembly and production, and supporting industries, which add another 365,000 workers to the electrical and electronics industry.
 This substance is widely used in solder fluxes in the electronics industry, and causes dermatitis, asthma and other respiratory diseases. (Oxford Handbook of Occupational Health, 2013, 2nd edition, p.59)