Blog Image
Profile Image Verifile
August 12 2013

Southeast Asia Responds to Worker Demands with Labor Reforms

The founding members of the Association of Southeast Asian Nations, or ASEAN (Indonesia, Malaysia, the Philippines, Singapore and Thailand), have all experienced remarkable economic growth since the organization was founded in 1967. Singapore alone went from a GDP of $1.3 billion to $239.7 billion in 2011. And while the other original ASEAN countries may not be as prosperous as Singapore, they are enjoying growth rates unheard of in the rest of the world. Malaysia's GDP grew 5.6% in 2012, and Indonesia's grew 6.4%, compared with the United States' 2.2%. However, wages in Southeast Asia (except Singapore) are among the lowest globally. Low wages are leading to increased union mobilization across Southeast Asia, and strikes are increasingly common. Some politicians have responded by establishing higher minimum wages and better worker protections. But what can an American or European HR manager expect when looking to hire in these countries? A lack of skilled labor is the first pitfall. As a result, local workers with the right combination of education and skills are highly sought after, and the competition for them is fierce.