Lack of application of the rule of law in Thailand has various negative impacts on labour market and business environment. Lax policing of minimum wage legislation and unknown numbers of migrant workers contribute to depression of wages as whole and reduced incentives to add value to production. Instead, short-term competitiveness through low labour-cost manufacturing is prioritized. Although individual transactions which may be deemed corrupt are small scale in nature, they appear to be repeated very regularly and therefore have a significant impact upon the income generating possibilities for local workers and for their future prospects, not to mention the overall competitiveness of the country. The corrupt activities also lead to lower levels of safety in the workplace and for such issues as collective bargaining and freedom of association. The paper attempts to identify the major issues involved and some possible solutions.