Government agrees to subsidise salaries of new graduates

The Thai cabinet this month approved a one-year project to subsidise the salaries of new graduates hired by the private sector. Beginning in October this year, the government will pay 50% of the salary paid to new graduates recruited by participating companies for a period of 12 months.

The THB23.48 billion (USS$755 million) programme aims to generate new jobs for 260,000 graduates from universities and vocational colleges as the ongoing economic downturn that has resulted from the COVID-19 pandemic continues to demand a serious adjustment from both government and young job seekers.

The money will be allocated from the THB400 billion (US$12.9 billion) fund earmarked by the government for economic restoration and stimulus measures.

The unemployment rate among new graduates in Thailand has risen alarmingly since last year. Suvit Maesincee, then minister of higher education, science, research and innovation, in a media interview in May estimated that there were about 500,000 jobless new graduates in the job market, out of the 524,893 new graduates this year.

By the end of 2020, there would be 300,000 more new graduates entering the scene, he said.

As the Bank of Thailand recently forecast that the economy would shrink by 5.3% this year, graduate unemployment mirrors the unemployment situation generally in the country. The Federation of Thai Industries in July predicted that the prolonged effects of the COVID-19 pandemic could drive up the number of unemployed people to 8 million by the end of this year.

In 2019 there were just 370,000 unemployed, or an unemployment rate of under 1%, according to official figures.

The government’s new programme targets specific groups of graduates and companies. Graduates who apply must not be older than 25, unless they graduated in 2019 or 2020. University graduates will receive a THB15,000 (US$480) monthly salary, with 50% of it paid by the government. Graduates with advanced vocational certificates will receive THB11,500 a month, and graduates with standard vocational certificates will get THB9,400.

Companies entitled to participate in the programme must be in the social security system and must not lay off more than 15% of their staff during the one-year period.

Supanida Sornruang (22), a Chinese culture and language student at Huachiew Chalermprakiet University, a private university in Samut Prakan near Bangkok, said the programme would help more people if it specified groups of new graduates who are really in need.

“Since the family income gap is high among new graduates, I think the government should target new graduates who really need help such as those from a poor family or who have to pay college debt,” she told University World News.

Pramote Saito (23), a new graduate in human resource management at a public university in Bangkok, sees the government initiative as an opportunity for him to find a job. Coming from a poor family, Pramote worked part time at a supermarket to support himself since his second year of university. He continues to work there while looking for a permanent job and says he will definitely look into the government programme.

“It is very difficult to find a full-time job right now. I search for job vacancies everywhere, but there was almost no advertisement for my field. I send them an application, but never get any answer,” he told University World News.

Pramote said he is now thinking of applying for jobs outside his field of studies. “I am willing to do different jobs as long as they are permanent and come with a decent salary and welfare [benefits]. I studied hard for my degree and don’t want to work in the supermarket forever,” he said.

The increasing unemployment rate among new graduates has led to a serious concern about possible permanent unemployment in the long run.

“I am worried about students who graduated this year. If they continue to be unemployed for one or two years, [they] will enter the cycle of permanent unemployment,” said Tanit Sorat, vice president of the Employers’ Confederation of Thai Trade and Industry, in an interview with local newspaper Thai Rath in July.

“The luckiest ones are those who graduated in fields that are relevant to the job market. Maybe 20% of them will get a job, while another 400,000 may become permanently unemployed,” he said.

“When another group of new graduates enter the job market in 2021, employers are likely to hire them instead of hiring this year’s graduates.”

Suchart Pornchaiwiseskul, director general of the Department of Employment, Ministry of Labour, in a media interview last month, expressed similar concerns. He suggested new graduates should be flexible and look for different types of jobs, including part-time work.

Supanida, who will graduate early next year, said she had already adjusted her career plan. Her 10-month exchange programme at a university in Nanjing, China, was cut short when COVID-19 broke out. Returning to Thailand to prepare for graduation, she now faces difficulties finding an internship placement.

“COVID-19 makes it difficult even to find a company to take me in as an intern,” she said. “I am a bit worried. I once hoped my Chinese language skills would get me a job in the tourism business, but it is now impossible. Now I will look for a logistics job at an import-export company instead.”