Border-town factories fear end of cheap, plentiful labour

In the first of a two-part series, Thailand correspondent Tan Hui Yee looks at the labour issues that expanding opportunities have brought to Mae Sot on the Thai-Myanmar border.

Mae Sot - She was always careful to stay in the shadows, carrying her shoes and slippers into her factory dormitory instead of leaving them at the door, and cooking meals indoors.

Ms Malar Aye, 33, was an illegal worker. The Yangon native had slipped into the Thai border district of Mae Sot and found work easily among factories there.

But her average wage of about 130 baht (S$5.20) a day was less than half of what was paid in Bangkok, spurring her decision to leave.

"I planned to 'take the jungle way' to Bangkok," she says, referring to the route used by human smugglers.

Then the Thai military seized power on May 22 last year and expedited the registration of undocumented workers.

This move pushed at least one million more migrant workers into the system.

The registration documents that Ms Malar Aye obtained put her Bangkok dream within easy reach, if not for one problem.

Her employer was hanging on to one of her documents.

He would not let her go.

Industries feeling heat

Mae Sot is one of the busiest gateway districts in South-east Asia's second-largest economy.

It is also an industrial base fuelled by an estimated 300,000 workers out of the two to three million migrant workers countrywide.

According to the Thai Immigration Bureau, almost 25,000 people from Myanmar used short-term border passes to enter Thailand via Mae Sot last February.

The actual arrival numbers are far higher.

Crossing the Moei River - the boundary between the two countries - is a 20-baht, five-minute affair on a boat.

On any given day, hundreds of young Myanmar workers disembark at unofficial landing points, disappearing into the cluster of bamboo and concrete shacks that form migrant villages on the water's edge.

But the garment and food processing factories that rely on such abundant and cheap labour are feeling the heat.

While a nationwide 300-baht daily minimum wage scheme implemented in 2013 has drawn attention to regional pay gaps, the state's latest effort to register migrant workers is promising to give them feet.

Industrialists are wary that even more workers may leave for higher-paying jobs elsewhere in Thailand and some - like Ms Malar Aye's employer - are resorting to questionable means to make them stay.

Mae Sot-based canned fruit and vegetable firm Great Oriental Food Products has lost 10 to 20 per cent of its workers since registration began.

"The problem is, when they are regulated, they can move anywhere in Thailand," its managing director Visut Limlurcha tells The Sunday Times.

Wages here are among the lowest in the country.

Undocumented workers - who dare not stray far from Mae Sot, where they can blend in easily among its populous Myanmar community - are paid as little as 100 baht a day building homes, producing textiles or sewing clothes for major global brands in the hundreds of contract manufacturing factories clustered here.

A report by the Europe-based advocacy group Clean Clothes Campaign released last month identified Jack Wolfskin as one of the brands with garments produced in Mae Sot.

Stop-start worker registration schemes by previous governments followed by crackdowns on new illegals have failed to significantly dent this pool of pliant labour.

Mr Myo Ko, 30, an editor with Mae Sot-based Yaung Chi Oo Workers' Association's media team, estimates that just one-third of the 300,000 migrant workers in the district now have some form of documents.

Yet even those with necessary paperwork are not safe from arrests.

Garment worker Yamin Eain, 24, was picked up by police four months ago while buying groceries at a market despite having a passport and work permit.

"I spent 20 minutes in the police station," she says. "My employer had to come and get me."

Situations such as Mae Sot's helped contribute to the downgrade of Thailand in the United States' Trafficking in Persons report last June, where Thailand fell to Tier 3, its lowest grade possible.

Limiting workers

to border areas?

In Mae Sot, few employers agree with the minimum wage rule, although none would go on record to say he was paying less than that.

Mr Chaiwat Vititamwong, who chairs the Federation of Thai Industries in Tak province where Mae Sot is located, says the minimum wage "is just not possible" and should be based on "reality", as living costs vary according to location.

"The workers only know their rights, but they don't know about their duty and have no discipline," adds the general manager of contract clothing maker TK Garment, which hires 2,000 workers in Mae Sot.

Since being forced to raise salaries to meet the national minimum wage, his company had to be stricter, "so that they don't chat and walk here and there".

Even then, TK Garment has moved its manufacturing base to Cambodia, but is keeping its factory in Mae Sot for the moment, an option which other manufacturers are keeping open if the government does nothing to resolve the labour shortage.

They may have an ally yet in the military government.

Then junta leader and current Premier Prayut Chan-o-cha said last June that his government had been looking into how to "restrict people from coming into the inner parts of the country".

"If we can keep these people around the borders on a daily work basis, then both migrant workers and the local people will benefit from jobs and earn enough income to provide for their families," he said in a televised address.

Last November, the military government began to revive long-discussed plans for a special economic zone in Mae Sot, alongside similar schemes for four other border zones.

One of the key plans, apart from tax breaks, is to legalise the employment of migrants entering and exiting Thailand daily on the border passes that currently do not allow them to work.

The talk has generated some buzz in Mae Sot, where hypermarts like Tesco Lotus and Makro have set up shop to tap into the wealth of the Myanmar elite.

According to Mr Amornpun Suntornwipat, the director of the Mae Sot branch of the Tak Provincial Land Office, the price of land in central Mae Sot's Prasatwithi Road has doubled to 50 million baht per rai over the last three months.

One rai is equivalent to 0.16 hectare.

However, businessmen like Mr Visut, familiar with the non-materialisation of previous governments' economic zone plans, would rather wait and see.

The more determined migrants, meanwhile, continue to head more than 400km south to the Thai capital.

Ms Malar Aye managed to secure her replacement document shortly after being interviewed by The Sunday Times.

In mid-December, she travelled to Bangkok to take up a job in another garment factory.

She no longer has to hide her shoes.

This article was first published on January 04, 2015.
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