Asia Pacific Journal of Social Work and Development

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Covid-19 and its impact on informal sector

workers: a case study of Thailand

Wichaya Komin , Rungnapa Thepparp , Borvorn Subsing & David Engstrom

To cite this article: Wichaya Komin , Rungnapa Thepparp , Borvorn Subsing & David Engstrom
(2020): Covid-19 and its impact on informal sector workers: a case study of Thailand, Asia Pacific
Journal of Social Work and Development, DOI: 10.1080/02185385.2020.1832564

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Published online: 16 Oct 2020.

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ASIA PACIFIC JOURNAL OF SOCIAL WORK AND DEVELOPMENT
https://doi.org/10.1080/02185385.2020.1832564

Covid-19 and its impact on informal sector workers: a case

study of Thailand
Wichaya Komina, Rungnapa Thepparp b
, Borvorn Subsinga and David Engstromc
a
Chulalongkorn University Social Research Institute (CUSRI), Bangkok, Thailand; bCollege of Interdisciplinary
Studies, Thammasat University, Bangkok, Thailand; cSchool of Social Work, San Diego State University,
United States & Bua Luang ASEAN Chair Professor, College of Interdisciplinary Studies, Thammasat
University, Bangkok, Thailand

ABSTRACT ARTICLE HISTORY

Informal sector (IS) workers comprise a significant proportion of the Received 12 July 2020
Thai work force and contribute significantly to the Thai economy. Accepted 30 September 2020
Nevertheless, IS workers have little social protection and are eco­ KEYWORDS
nomically marginalised, making them especially vulnerable to the Informal sector; Thailand;
effects of the government’s shutdown of the Thai economy to Covid-19; economic impact
address the COVID-19 pandemic. Using a sample of 384 IS workers,
researchers found that IS workers experienced dramatic decreases
in their monthly income, although the reduction varied across
occupation and geographic region. To compensate for reduced
income, IS workers tapped their savings and increased their debt.
A Thai government programme to provide income support for
workers during the shutdown reached less than half of IS workers.
Social workers can help provide better social protection to IS work­
ers from pandemic-amplified social exclusion.

Introduction
Like other Asian countries, Thailand has a large informal sector (IS) that is important to
the Thai economy. Estimates on IS worker numbers range from 43 percent (International
Labor Organization, 2011) to 54 percent (Thailand National Statistics Office, 2019) of
Thailand’s nonagricultural work force. The International Labor Organization (2002)
defines informal sector as ‘units engaged in the production of goods and services . . .
with little or no division between labor & capital as factors of production & on a small
scale . . . with [no] formal guarantees.’
Informal sector work is dirty, dangerous, and difficult – the 3 Ds – and often poorly
paid. On the margin even during prosperous times, IS workers are especially vulnerable
to economic downturns (Doane et al., 2003; Finnegan & Singh, 2004; Mehrotra, 2009).
Because social insurance schemes are tied to formal employment, IS workers often are
not covered by programmes such as unemployment, disability, and retirement
(International Labor Organization, 2016).
In the 1990s and 2000s Thailand expanded both the scope of and eligibility for
formal social insurance programs, but these policy reforms still left IS workers largely

CONTACT Rungnapa Thepparp [email protected]

© 2020 Department of Social Work, National University of Singapore, Singapore
2 W. KOMIN ET AL.

uncovered. Any social welfare protection IS workers receive comes largely from public
assistance programs or private charity (Sungkawan & Engstrom, 2019). IS workers were
excluded from the social protection afforded government and formal sector workers. IS
workers also face low levels of educational attainment, income, and economic oppor­
tunity (Senanuch & Suntonanantachai, 2018; YimYam et al., 2000), and have little
access to low-interest private capital via traditional lending institutions such as banks
(Fernquest, 2012). In effect, IS workers encounter multiple forms of social exclusion
that prevent them from exercising ordinary social processes and rights (Popay et al.,
2008).
Though reliant on family and community, IS workers can weather normal economic
recessions. However, with the onset of the COVID-19 pandemic, the Thai government
ordered a 75-day national lockdown, which created an immediate and deep recession.
The only question was how hard the negative effects would hit IS workers.

Methods
A team of researchers from two universities in Bangkok, in collaboration with an IS
nongovernmental organisation (NGO), developed a survey to understand how
COVID-19 impacted Thai IS workers. The survey, comprised of 35 open-and-
closed ended questions, was administered in person or phone by project staff to
400 IS workers in the five regions of Thailand. A convenience sample was drawn
from workers associated with the IS NGO and recruited by word of mouth. Members
of the research team and community development workers with the NGO assisted
those respondents who could not complete the questionnaire on their own. A total of
380 fully completed surveys were received (a completion rate of 95%). This paper
reports on the characteristics of the sample and examines data from two close-ended
questions (‘How has COVID-19 affected you financially?’ and ‘How did you adjust to
COVID-19?’). A t-test was used to determine the before-and-after COVID impact on
income. Researchers also explored whether incomes varied before and after COVID
among different IS sectors (e.g., domestic workers, street vendors) and the pan­
demic’s impact on IS workers living in various regions of the country. To analyse
differences among IS sectors and regions, ANOVA was used.

Results
Characteristics of the sample
The majority of the sample are female (65.8%) and the average age is 50 years.
Approximately 60% of respondents are married and have an average of 4 family members
in their households, with an average of 2 family members being employed. Almost half
the sample (46.3%) had completed compulsory education such as secondary school or
had obtained a vocational certificate/diploma; a slightly lower percentage (43%) had
completed no more than primary school (Table 1).
 ASIA PACIFIC JOURNAL OF SOCIAL WORK AND DEVELOPMENT 3

Table 1. Demographic characteristics of IS workers.

Sex, Education, and Marital Status Percentages N
Sex 34.2 130
Male 65.8 250
Female
Educational Level 4.8 18
Less than primary school/No school 38.1 144
Primary 46.3 175
Secondary school/vocational certificate or diploma 10.8 41
Higher education/bachelor’s degree or higher 100.0 378
Total
Marital status 15.6 59
Single 59.9 227
Married 24.3 91
Divorced 0.3 1
Widowed 100.0 378
Total
Mean S.D. Range
Age (years old) 49.94 11.841 17–75
Number of children (persons) 1.52 1.107 0–5
Number of family members (persons) 3.77 1823 1–15
Number of family members who are employed (persons) 2.15 2.15 1–6
Number of family members under 18 years old (persons) 0.59 0.831 0–4
Number of family members 60 years old and over (persons) 0.75 0.883 0–5

Economic security before pandemic

The study classified the informal sector as comprising nine types of work (see Table 2).
Street vendors make up the largest group (21%) and garbage collectors (2%) the smallest.
Except for motorbike taxi drivers, women comprised the overwhelming majority in all
work categories. Prior to the COVID outbreak, 23% of the sample worked another job to
supplement their income.
The income IS workers earned ill-prepared them to weather the economic conse­
quences of a recession. Before the pandemic, the average monthly income was 13,507
THB ($434 US), whereas monthly expenditures were 10,031 THB ($322 US), leaving IS
workers about 3,200 THB ($103 US) per month – an average daily income of less than 4
USD US. Thus, IS workers were slightly above the Thai poverty rate (100 THB per day)
for urban areas and had income double the 1.9 USD per day used to measure extreme
poverty internationally. This income level supported an average family size of 4 persons.

Table 2. Average income and percentage of change by occupation*.

Pre- COVID Post-COVID
Main Occupation N THB (USD) THB (USD) Change (%)
1. Street vendor 80 18,196 ($583) 4,831 ($155) 73
2. Home-based worker 74 9,321 ($298) 2,166 ($69) 77
3. Motorbike taxi rider 60 13,693 ($428) 5,208 ($167) 62
4. Barber/haircut/beauty salon 41 16,463 ($527) 1,126 ($360) 93
5. Domestic worker 37 10,121 ($324) 5,168 ($165) 49
6. Taxi driver 28 16,500 ($528) 6,446 ($206) 61
7. Masseuse/Thai masseuse 27 11,481 ($367) 496 ($159) 96
8. General employment 26 9,423 ($302) 1,711 ($548) 82
9. Garbage collector 7 14,142 ($453) 3,928 ($126) 72
Total 380 13,506 ($432) 3,585 ($115) 73
*Conversion U.S. dollar (USD) at $0.32 per Thai baht (THB)
4 W. KOMIN ET AL.

Indebtedness further reduced income. Approximately one-half of the sample had

a financially burdensome existing loan, and many of those loans were from loan sharks
who charged very high interest rates.

Economic and social impact

The COVID-19 pandemic devastated IS workers. Approximately 95% of the sample
indicated that they faced economic insecurity because of diminished income. Indeed,
IS workers reported making only 3,586 THB ($115 US) or only 27% of their average
monthly income before the pandemic, excluding expenses. This was a statistically sig­
nificant drop in income (t (379) = 20.563, p = 0.000).
This reduction put respondents near the extreme poverty level of 1.9 USD per day. With
the Thai economy shuttered, IS workers could not rely on their usual sources of income.
Workers reported having fewer customers (57%), being laid off or working fewer hours
(12%), or working fewer hours or days (7%). Many IS workers did not have enough money
to buy food and necessities (39%), and had insufficient income to care for family members
(33%) or to pay for motorcycle or car loan payments (19%) or mortgages or rent (13%).
IS workers responded to the dramatic drop in income by relying on strategies often
employed by economically marginalised populations (Bangkok Post, 2020; Khidhir,
2019). To survive, 84% of respondents sold valuable assets to pawn shops; another 33%
withdrew savings. More than 25% received a personal loan (e.g., from family and friends)
and another 11% obtained money from loan sharks. Established financial institutions like
banks were irrelevant to IS workers: only 5% acquired loans from formal sources of
capital. Sixteen percent of the sample requested modification of existing loans to make
repayment less onerous. Approximately 27% of IS workers relied on charitable organisa­
tions for food and necessities.
The Thai government responded to the pandemic by establishing an emergency
cash grant program that provided a total of 15,000 THB ($482 US) for each eligible
worker. This program seemed ideally suited to assist IS workers in navigating finan­
cially troubled waters, and almost 90% of IS workers registered for cash grants – yet
only 44% received an award, while about 20% were awaiting the processing of their
applications at the time the survey was done (approximately 45 days after the govern­
ment program started). Tellingly, nearly 25% of the sample had their applications
denied (some were appealing the decisions).
The reasons for the low award rate varied. Most importantly, many IS workers were
missing from government databases or were listed as farmers (making them ineligible for
assistance). In other cases, IS workers could not successfully complete the online regis­
tration, while others struggled with understanding the application because of low levels
of education. Government and NGO social workers and community development work­
ers attempted to bridge the technological divide by assisting IS workers with their online
applications. Without this assistance, even fewer would have qualified. What should have
been a financial lifeline ended up dashing the hopes of many workers who stated that they
were more afraid of being hungry and homeless than of dying from COVID-19.
 ASIA PACIFIC JOURNAL OF SOCIAL WORK AND DEVELOPMENT 5

Differences among IS workers

In Thailand, workers’ economic well-being varies by IS sector. The research study
examined nine categories of IS work. Prior to the pandemic, street vendors, taxi drivers,
and beauticians/barbers had the highest monthly income; home-based and general
employment workers had the lowest (see Table 2). After the shutdown, domestic workers
experienced the least dramatic drop in monthly income (49%), largely because domestic
work is done within single household and thus has only one consistent customer. Not
surprisingly, masseuses/masseurs (96%) and beauticians/barbers (94%), whose work puts
them in close contact with customers, had the greatest income loss because their shops
were shuttered. Other IS workers deemed essential, such as taxi drivers and street
vendors, had less income because they had fewer customers. The decrease in income
by occupation was statistically significant (F(8, 371) = 5.990, p = 0.000). On average, IS
workers had 73% less income after COVID-19 than before.

Regional differences
The economic impact of COVID-19 varied by IS sector and also by region. The IS is often
analysed at the national level (Buddhari & Rugpenthum, 2019; International Labor
Organization, 2002; Warunsiri, 2011), missing the very real differences among regions.
This is certainly true for Thailand, which is divided into five regions, each with least one
major metropolitan area: Bangkok MSA, North (Phayao and Chiang Rai), East (Khon
Kaen and MahaSarakham), Central (Nakhorn Pathom, Samut Songkhram, and
Ratchaburi), and South (SongKhla). Bangkok is the most populous region, with
a diversified economy and the lowest poverty rate (1.1%). The North and East are
primarily agricultural areas with comparatively high rates of poverty (9.2% and 11.4%,
respectively). The Central region is home to both manufacturing and agriculture and has
a poverty rate (4.5%) slightly higher than Bangkok. Finally, the South (home to a large
share of Thailand’s Muslim population) relies on agriculture and fishing, and has
a slightly higher poverty rate (11.8%) than the North or East (Office of the National
Economic and Social Development Council [NESDC], 2018).
Prior to COVID-19, IS workers in Bangkok had the highest monthly income (16,604
THB [$533 US]), while those in Central region had the lowest (9,744 THB [$313 US]).
The regional variations increased after the pandemic started. These differences become
most apparent in the percentage change in income before and after the shutdown (see
Table 3). On average, IS workers in Bangkok saw their monthly income drop by 53%,
a notably smaller decrease than in the other regions, which ranged from −69% (South) to

Table 3. Average income and percentage of change by area*.

Pre-COVID Post-COVID
Area N THB (USD) THB (USD) Change (%)
Bangkok 77 16,604 ($531) 7,801 ($250) 53
North 82 12,604 ($403) 2,518 ($81) 80
Northeast 61 16,446 ($526) 3,078 ($99) 81
Central 80 10,751 ($344) 926 ($30) 91
Southern 80 11,966 ($383) 3,668 ($117) 69
Total 380 13,507 ($432) 3,585 ($115) 73
*Conversion U.S. dollar (USD) at $.32 per Thai baht (THB)
6 W. KOMIN ET AL.

-%91 (Central). The decrease in income by region was statistically significant (F(4,
375) = 19.625, p = 0.000).
IS workers outside Bangkok could more easily return to their home villages/communities
because the government shutdown permitted travel within a province. Social workers at the
provincial level assisted migrant IS workers to access government assistance. Movement
from urban to rural areas allowed returning IS workers to reduce expenses and to tap into
local resources and social capital for assistance, a phenomenon observed previously with
natural disasters and economic change (Ampai, 2013; Jutaviriya & Lapanun, 2014;
Puttawong et al., 2016). This mitigated some but not all of the economic disaster.

Implications and conclusion

The COVID-19 pandemic and resulting economic downturn aggravated the margin­
alisation and social exclusion already experienced by Thailand’s IS workers. With income
reductions and little savings, IS workers found themselves struggling to pay for food,
housing, and other daily living expenses; often incurring more debt to do so.
Disasters such as the pandemic expose society’s fault lines, especially when normal
means of production are disrupted. Social protection programs intended to handle
widespread job loss, such as unemployment insurance, provided no help to IS workers
because they were largely ineligible. The emergency financial relief program set up by the
Thai government assisted fewer than half of workers in the study, and even those helped
often had to wait for long periods for aid. If the government had had a more current
database on IS workers, more of them would have been helped and helped faster.
The IS is not monolithic. Very real income differences exist within the occupations
that make up the sector and among the regions. Though all IS workers were financially
harmed by the pandemic, the burden was not shared equally: some fared better than
others depending on their occupation and location. Efforts to remedy the social exclusion
so dramatically revealed by COVID-19 must take into account.
Social workers have an important role in changing the process from exclusion to
inclusion. First, social workers can develop an outreach program to formally get IS
workers into government databases (as noted, many IS workers failed to receive
COVID income support because they were unknown to the government). Such registra­
tion could also be used to match IS workers to other income support programs.
Social change usually comes from the bottom up. Clearly the community organising
and development traditions of social work are well suited to foster social change. Like all
efforts for social reform, IS workers must be better organised and empowered to pressure
the government for greater social protection. Social workers can build coalitions with IS
workers, allied NGOs, and the media to advocate for policy change. Social protection
could include expanding unemployment and old-age pension systems to cover IS work­
ers – in essence, treating IS workers like formal sector workers.
COVID-19 revealed that IS workers had little access to normal sources of capital (e.g.,
banks) and instead relied on pawn shops and loan sharks for emergency loans.
Collaborating with IS workers, banks, and the government, social workers can facilitate
the development of mechanisms to secure low-interest loans to provide capital. Perhaps
a government-backed credit fund for IS workers could be established, and replenished as
payments are made. Loan applications could be expedited by having borrowers’
 ASIA PACIFIC JOURNAL OF SOCIAL WORK AND DEVELOPMENT 7

information linked to existing government databases. Social workers can also strengthen
IS workers’ economic capabilities by developing online marketing and internet technol­
ogies to link IS workers to new customers and opportunities.

Disclosure statement
All authors declare no conflict of interests.

Funding
This work was supported by the Chulalongkorn University Social Research Institute (CUSRI).

Notes on contributors
Wichaya Komin, MA, is a researcher of the Chulalongkorn University Social Research Institute
(CUSRI) and the head of the Rights and Social Justice Research Group (RSG) of CUSRI. Her main
research focuses on the livelihoods and rights of marginal groups such as the low-income,
disadvantaged, and informal workers in Thailand. She also has worked collaboratively with net­
works of academia for informal and disadvantaged workers, organisations for informal workers,
organisation for the urban poor, and informal worker organisations in Thailand.
Rungnapa Thepparp, PhD, is an Assistant Professor of the College of Interdisciplinary Studies at
Thammasat University, Lampang Campus, Thailand. Her educational background is social work
and social welfare and her research focuses on community-based welfare and social policy for
marginal persons. Dr. Thepparp is currently developing community-based social welfare and
social protection for marginal persons such as migrant workers, human trafficking survivors,
and older adults with difficult situations (e.g., poverty, abuse).
Borvorn Subsing, PhD, is a researcher of the Chulalongkorn University Social Research Institute
(CUSRI). His research focuses on livelihoods and rights of marginal groups, such as the dis­
advantaged, elderly, and informal workers. Dr. Subsing is presently an active member of policy
research groups on street vendor management at both the local and national levels.
David W. Engstrom, PhD, MA, is a Professor of Social Work at San Diego State University and the
Bua Luang ASEAN Chair at the College of Interdisciplinary Studies, Thammasat University,
Bangkok, Thailand. His research focuses on immigration policy and services to immigrants and
refugees. Dr. Engstrom has written extensively on the plight of vulnerable immigrant populations,
such as torture survivors, trafficked persons, and migrant workers, and has explored the role of
bilingual social workers in service delivery. Dr. Engstrom co-developed the concept of vicarious
resilience which recognises the positive effect of trauma work on therapists, and has co-authored
six articles refining its conceptual development. He is presently developing a culturally reflexive
trauma assessment scale to better document the suffering of human trafficking survivors in
Thailand. Dr. Engstrom has received several awards for his international work: CSWE’s Partners
in Advancing Education for International Social Work (PIE) in 2017 and SDSU’s Outstanding
International Scholar in 2016.

ORCID
Rungnapa Thepparp http://orcid.org/0000-0002-9139-8311
8 W. KOMIN ET AL.

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