Asia-Pacific, Development & Aid, Economy & Trade, Financial Crisis, Headlines, Human Rights, Labour, Population

Q&A: ‘Children Need to Adjust to the Economic Crisis’

Sutthida Malikaew* interviews YAOWAPA DONSAY, coordinator of the Women Workers for Freedom Group in Thailand

BANGKOK, Dec 23 2009 (IPS) - During the Asian financial crisis in 1997, Yaowapa Donsay was laid off from the Thai garments factory she was working in. Subsequently, she organised a group of jobless women workers – and that marked her transformation into a labour activist.

As coordinator of the Women Workers for Freedom Group, she campaigns for the rights of women workers and for gender equality in the workplace.

In an interview with IPS, Yaowapa talks about the social impact of the global economic crisis, which in South-east Asian countries like Thailand has been felt in terms of lower orders from overseas markets in the industrialised countries, slashed working hours in factories, job losses and tighter budgets for families and their children.

In November, World Bank figures put at 12.7 percent the estimated drop in 2009 in Thailand’s exports, which account for more than two-thirds of its Gross Domestic Product (GDP). Economic output in Thailand for the first half of 2009 dropped by 6 percent from the previous period, according to the Asian Development Bank. GDP is expected to contract by 3.2 percent, the Bank added. Unemployment rose to 2.1 percent in the first quarter of this year, easing to 1.8 percent in the subsequent quarter.

This time around, says Yaowapa, the crisis is different from the 1997 one in terms of how employers and workers try to keep afloat. There has been a marked increase in work subcontracted to labourers working from home, and many got compensation for losing their jobs. But hard times over the past year still mean some children have had to move from private to public schools and cut back on allowances, so the Thai government’s free education programme has come in handy.

Q: What has happened to Thai employees during this global financial crisis, whose effects are still being felt? A: The previous crisis (in 1997) was worse than this one. During the last time, companies (in Thailand) closed without giving any warning to workers and with no compensation for those who lost their jobs. That was also the reason why our group was established. This time, the crisis hit two sectors the most – garments and electronics. Most of the laid-off workers got compensation, so they did not suffer as much as the workers in the previous crisis.

(But) the garment companies chose to lay off the older workers, because with their older age they might have less productivity than the younger ones. The companies in electronics chose to lay off the younger workers, with fewer working years like one to three years, so that they could cut the cost of compensation they need to pay.

Q: Do the workers who kept their jobs get lower pay? A: In general, the workers’ salaries are still the same, but they get less income because overtime (OT) is cut. As you might know, the workers can survive because they have OT. Today, the minimum wage for workers in Bangkok and the suburbs is 203 baht (6.15 U.S. dollars) daily. Overtime rate is about 38 baht (1.15 dollars) per hour, but actually, they are allowed to work for not more than three hours per day. Many workers who want more money seek some loan to buy sewing machines and do sewing at home, so they get money by the piece or by contract. The older laid-off workers do the same. They use the compensation they got from their factories to buy sewing machines and work at home. With the skills they already have, they can still have some work to do although they have been laid off.

Q: Why is it that they still have some work to do at home, if the lack of orders has forced companies and factories to close? A: In fact, the situation around the crisis this time is different from the previous one. The last time, many factories closed and there was no more production. This time, many companies have learned lessons from the last crisis, so these companies know how to survive.

When the factories close, it doesn’t mean that they totally stop production. They just downsize the production unit. They close the big factories, but subcontract their orders to small factories. This helps them ease their burden of electricity, water supplies bill and health insurance for workers. Small factories pay the daily labour rate, no overtime and no other fringe benefit. Some small factories have subcontracted to workers based at home and pay them by piece or by deal, depending on the type of work.

Q: It means the companies do not totally close, so the workers still at least have some income. But what protection do they have as home-based workers? A: They just downsized their production unit. For laid-off workers, this time almost all of them got compensation. Therefore, at least they have some amount of money to start new lives. Some can invest in selling food or in other businesses. . . . Somehow, some companies might take advantage of the crisis to reduce the benefits for workers. I was told by workers from one garments company that they worked hard every day, but that they did not get the yearend bonuses as they should.

Q: What happens to the families of those who are unemployed or whose income is cut? How are their children and other young people affected by the crisis? A: Most of workers in these factories are from the countryside in north- eastern Thailand (the country’s poorest region). Usually, they leave their children behind with the grandparents and they send money home every month. Let’s say that, usually, they send 2,000 to 3,000 baht (60 to 90 dollars) a month. Now when the workers get less money, some might be able to send back only 1,000 baht (30 dollars) a month or once in two or three months. People left behind at home might face difficulties in cases like this.

Q: What other social impacts do economic problems cause? A: Some family problems happened after the crisis as well. For example, I came across a young couple that had been laid off. The husband could not accept that he was now unemployed. He turned to alcohol, and the husband and wife quarreled a lot. They have a one-year-old baby. Finally, the woman couldn’t bear to continue living with him. They divorced and the woman is now solely responsible for bringing up their kid. She has invested in a business selling some food, but it is not doing well. She cannot send money back home (to her village). If there is a request for money from her parents, she has to borrow some money, no matter from what source.

Q: How about children and young people who are in school? A: During the crisis, the kids have had to adjust and live with limited or no budget. Some got less money for buying food in school. Some of them can have money only for transportation, and need to prepare food to bring to school. Some might have to skip lunch. They also face difficulties when the school requests them to get additional educational material. Some have had to move from private to public schools instead.

Q: Could you explain this more, and how the government is dealing with this part of the crisis? A: Fortunately, this year the government started a free education programme for all students to go to public schools or to some private schools that were willing to join the programme. It has helped a lot; at least the children do not need to worry about tuition fees. They are also provided with school uniforms. Still, they need to have extra expenses for other educational material and activities that are not covered by the government budget.

With their parents’ lower income, the children may also face difficulties in participating in some school activities. However, as many laid-off workers have children who are still in primary to high school, most of them still come under the free education programme. They can still continue school. But for some who have almost finished high school, their parents may have to seriously decide whether they should continue studying or stop at the high school level, and work.

There are also some small children who used to go to elite private kindergarten school. When their parents’ income got cut, they moved to government-run community childcare centres instead because these are free. It’s a similar case for some more senior students in private schools, who have had to move to public schools.

Q: Though children are not able to stay in the same schools, would it be right to say that the Thai government’s free education programme is at least keeping them in school? A: That’s right. I don’t see many children having to leave school during this crisis, but they have to adjust to the real situation they are facing.

Q: What else is the government doing now that is different from the 1997 crisis in order to help the workers and their children? A: Well, for the children, free education can keep them in school. This is different from the previous crisis. For the workers, nothing has changed much in term of policy. But at the beginning of the crisis, the 2,000-baht (gift) for all workers who have social security cards was a new thing.

(*This feature was produced by IPS Asia-Pacific under a series on the impact of the global economic crisis on children and young people, in partnership with UNICEF East Asia and the Pacific.)