Laotian Workers, Facing Poor Economic Conditions, Seek Work Elsewhere

Laos Economy

VIENTIANE, LAOS — Large numbers of Laotian workers, facing poor economic conditions, are seeking work in Thailand, South Korea and Japan, bringing Laos millions of dollars in repatriated salaries but exposing the workers to debt traps and human trafficking.

Laos has the region’s lowest minimum wage, a problem exacerbated by inflation and a substantially depreciating currency, the kip. It also is increasingly dependent on China because of debt and substantial Chinese investments in Laos’ energy sector.

Meanwhile, government reports say a shortage of skilled workers – which the Energy and Mines Ministry attributes to a “brain drain” and insufficient funding – hampers domestic hydropower and mining projects.

The Lao Ministry of Labor and Social Welfare reported last year that of the 303,391 Lao workers overseas, 100,230 acquired jobs legally, while 203,161 sought employment in neighboring countries without proper permits.

A report published in February by the Vientiane Times said approximately 228,000 Laotians were working in Thailand, including 70,000 without permits.

Another 13,000 were working in South Korea, the report said. These figures do not include large numbers of migrant workers who illegally cross the borders into neighboring countries, especially China.

There is little recorded data available on Lao migrant workers in China. However, it is reported that some Laotians cross the border for weekly and seasonal jobs in China from some districts in the northern Luang Namtha province, according to a spokesperson for the International Organization for Migration Regional Office for Asia and the Pacific in Bangkok.

“Such migrant workers use passports and border passes to cross borders but find irregular work in China through Lao and Chinese brokers. The authorities of both countries, as well as their families, are unaware of their status of working and living in China,” the spokesperson said.

“They cannot even locate the specific areas where they are employed and residing. This doubles their vulnerability to the risk of abuse and exploitation.”

Traffickers, he said, use media channels such as TikTok to lure workers and use deception, brokers, and peer pressure to entice them into fraudulent schemes. Many Lao migrant workers are routinely promised good-paying jobs in online services or in cryptocurrency.

Meanwhile, the primary challenge for work migration to South Korea is that Laotian migrant workers must pay all the costs before departure, including domestic travel, new passports — which can take months to obtain — and recruitment agency fees. Workers also must pay back the agencies, which deduct extra fees from their monthly salaries, the IOM spokesperson told VOA.

A 19-year-old recent high school graduate from Luang Prabang told VOA he could make about $560 a month in South Korea, more than twice what he could make in Laos.

He said his brothers, all with bachelor’s degrees, are barely making $375 a month and had advised him to skip college and find a job abroad. In October, Laos raised its minimum wage from $61 per month to $75 in the face of inflation, which hit 40% last year and was around 25% in this year’s first quarter.

Government’s financial gains from migrant workers

Lao workers abroad send back to Laos an average of over $35.5 million monthly, totaling $426 million annually, according to government reports from mid-2023.

In July, Lao Prime Minister Sonexay Siphandone highlighted the importance of remittances for the Lao government, announcing initiatives to promote employment opportunities domestically and internationally by decentralizing job placement centers, modernizing job search services, and promoting self-employment.

“We’ve established 18 job placement service points at the provincial level, 36 at the district level, and engaged four domestic and foreign job placement service enterprises,” Sonexay told the National Assembly.

“Efforts include modernizing the job search service mechanism, connecting databases of Lao and foreign workers, and integrating worker salary information with systems like TaxRis,” he said, referring to the government’s tax collection system.

Additionally, in October, Laos and South Korea initiated a project to streamline cross-border money transfers, with plans for expansion to Thailand and Japan, led by the Lao Labor Ministry, the Bank of Laos, Lao Foreign Commercial Bank, and South Korea’s Global Loyalty Network Company.

Not cost-free

These benefits to Laos come at a cost, though.

Despite promised higher pay for work abroad, deceptive recruitment practices often lead to exploitation and debt bondage because of upfront fees and unclear agreements, said Matthew Friedman, head of the Hong Kong-based Mekong Club, an antislavery organization.

“They often don’t really know what they’re getting into. They then sign agreements without fully understanding what they’re signing or interest rates and fees,” Friedman said from his temporary location in Singapore.

In South Korea, typically Seoul or Busan, workers become ensnared by debt, unable to leave until debts are cleared, he said.

Lao workers, mostly young adults or teenagers who are increasingly migrating to Thailand in search of higher-paying jobs as construction workers, waiters, or maids, often face exploitation and unsafe conditions, according to the IOM.

Despite legal employment agreements between Thailand and Laos, illegal migration continues as loopholes within the legislative frameworks and tracking systems of both countries facilitate the entry of undocumented workers.

The most recent case, on March 3, unfolded in Udon Thani, in northeast Thailand about 75 kilometers from the Laotian border, where local police rescued an 18-year-old Lao woman working as a maid from alleged severe abuse by her employer.