Since the COVID-19 period, Thailand's labor market has recovered rapidly, indicating an overall return to normalcy. The unemployment rate, a key labor market strength indicator, has steadily improved after peaking at 2.25% in Q3/2021 to just 0.7% in the first two months of Q3/2025, below the pre-COVID five-year average of 1%.
A deeper analysis reveals increasing fragility in Thailand's labor market, influenced by both internal and external factors. Domestic challenges include persistently low economic growth, a sluggish manufacturing recovery, high living costs, and some employers planning further staff reductions. This causes current workers to lose jobs and makes it harder for young graduates to find employment.
External challenges stem from uncertainties in trade wars and escalating border conflicts, leading to decreased revenues for businesses due to higher export costs and reduced competitiveness domestically and internationally. This inevitably affects labor, as employers may cut jobs or reduce working hours to lower operational costs.
A survey of over 702 employers by JobsDB by Seek found that over 25% reduced their staff in 2024, including both permanent and temporary contract workers. Reductions occurred across all forms, such as layoffs or not replacing employees who resigned, aiming to cut costs and make organizations more agile to adapt to the highly uncertain economic situation. The greatest permanent full-time job cuts were in accounting, administration and human resources, customer service, manufacturing, sales/business development, and IT.
The trend of staff reductions is clearer amid a slow manufacturing recovery and continued low economic growth in Thailand. Additionally, uncertainty from U.S. trade wars has begun to impact employment in high-risk sectors, especially rubber, textiles, seafood (shrimp), and automotive industries, as well as moderate-risk sectors like cassava, sugar, palm oil, pet food, commercial vehicles, steel, transportation, and logistics.
Unemployment rates in the Social Security system under Section 33 or 38 have steadily increased since early 2025, reaching 2.16% in the first two months of Q3/2025, down from a peak of 4.4% in Q3/2020. Meanwhile, youth unemployment (ages 15-24) rose to 5.9% in Q2/2025, the highest since 2023, and unemployment among young university graduates increased to 18.9%, up from 16.1% in Q1/2025. Although overall unemployment in Thailand has remained below 1% for several years, these figures for certain groups highlight growing fragility in the labor market and make it harder for new workers to find jobs.
This aligns with a study by the Thailand Development Research Institute (TDRI) in Q4/2024, which found that among 221,339 online job postings from 23 websites, only about one-fifth (22%) were entry-level positions requiring no work experience, while over 63% demanded prior experience.
Average household income declined by 4.6% year-on-year in the first half of 2025, falling from 29,502 baht per month in the first half of 2023 to 28,151 baht. Income from employment dropped significantly by 5.7% year-on-year, partly due to some workers shifting to freelance work with more unstable earnings since the COVID-19 crisis. The informal labor sector increased to 52.8% in 2024.
Additionally, Thailand entered a fully aged society in 2024, with those aged 60 and over accounting for 20.8% of the population, surpassing the 20% threshold defined by the United Nations. These factors will directly impact the labor market structure, workers' incomes, and expenses in the future.
Thai workers need to recognize ongoing changes from both internal and external problems and prepare for future risks with the "3 Adaptations" strategy, which includes:
(1) "Adapt skills" by embracing lifelong learning, focusing on acquiring new skills, mastering technology (such as digital and AI), and improving work efficiency to meet labor market demands.
(2) "Adjust financial attitudes" by building financial resilience—managing income and expenses carefully, diversifying income sources, and maintaining discipline in saving and debt repayment to create financial security.
(3) "Keep up with the world" by staying aligned with global trends and new work patterns, adapting to changes, and embracing new work styles and values. Workers must be ready to change their approach and open themselves to new opportunities to survive in the modern labor market.
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