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StrontiumDog

Concern over promise for Bt300 minimum daily wage

Concern over promise for Bt300 minimum daily wage

By The Nation
Published on July 5, 2011

The new minimum daily wage has become a major concern for employers and officials at the Labour Ministry, who are awaiting word from the incoming government, which promised voters during the election campaign it would back a pay hike for workers.

Somkiat Chayasriwong, permanent secretary at the Labour Ministry, said yesterday the Bt300 wage promised by Pheu Thai Party would be also be discussed at a meeting of the Wage Tripartite Committee scheduled tomorrow [July 6].

"As a government agency, the policy on the new [daily wage] rate will need to be reported and approved by the ministry's political leadership," he said.

A labour leader, Thawee Techatheerawat, said a flat rate of Bt300 and a starting salary of Bt15,000 a month for all university degree graduates - another promise by Pheu Thai Party - would be difficult. But labour groups would advocate the Bt300 rate to start from January 2012 at a meeting on Thursday.

Another labour leader, Chalee Loysoong, said the new government would be under huge pressure if it could not guarantee the flat Bt300 rate.

Withoon Kamolnaruemet, head of the Khon Kaen chamber of commerce, claimed a flat Bt300 rate would cause a 50-per-cent jump in operating costs for of most employers. Such election promises had already caused many companies to rethink whether they want to invest in Thailand.

Small and medium enterprises would be most affected by the Bt300 rate, and half of them would be suddenly faced with losses, or eventual closure. "And that would result in 50 per cent of (SME-associated] unemployment across the country," he warned.

Three foreign business owners based in Khon Kaen were seeking advice from his chamber about possibly relocating their businesses to countries where labour costs were cheaper, as a result of the possible hike, including the flat Bt300 rate promised by Pheu Thai.

Withoon said a new rate of Bt190 in Khon Kaen, up from the current rate of Bt167, was still acceptable to employers, but Bt300 would need to be backed by other measures, which he said Pheu Thai had never discussed or revealed.

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"Slavery is the daughter of darkness; an ignorant people is the blind instrument of its own destruction; ambition and intrigue take advantage of the credulity and inexperience of men who have no political, economic or civil knowledge. They mistake pure illusion for reality, license for freedom, treason for patriotism, vengeance for justice."-Simón Bolívar

dirtydog

This will bring in 10's of thousands of illegal workers, take the construction industry for example, 80 percent of Thai construction workers are barely worth 200baht perday, Burmese and Cambodian will work for that, they also work harder and don't waste time having days off as they want money to send their families.

Most Thais are not worth a salary of 300baht perday, many will be unemployed, what will they do for money, aint no dole or social here yet, go out robbing or drug dealing?

Gerbil

More girls heading to Pattaya as they get shut out of their factory jobs? Thank PT & the Reds for doing their bit to relieve poverty.

Butterfly

Nana will be full again

Loy Toy

I have a few blokes arguing with me about this on another thread.

RIP Thailand's industrial and export sector if Yingluck keeps her election promises.

Butterfly

it's actually the right thing to do,

manufacturers can afford it, they have been making record profit

Butterfly

you can't move factories overnight, Thailand is still a good base for those firms under all the BoI privileges

Loy Toy

Don't think so mate and particularly with regard to the Automotive industry.

Yes some sectors have picked up in Thailand because of the disasters in Japan but before then they were struggling.

I remember a recent debate about increasing the minimum daily wage to 250 Baht and there was a lot of opposition across the board.

English Noodles

Yes there is.

Full social security details, in Thai, can be found here;

สำนัà¸�งานประà¸�ันสัภ‡à¸„ม

Criteria and Entitlement Benefits

Having made contributions towards unemployment for not less than 6 months within a period of 15 months prior to unemployment

Terms and conditions giving rise to the entitlement:

1. Must apply for registration of the unemployed at the State Unemployment Office within 30 days without having to wait for the Unemployment Certificate from the Employer as to declare the entitlement tentatively.
2. Is capable of performing the work and is ready to take on suitable job as offered.
3. Must not reject the job training.
4. Must report to the Employment Office for not less than 1 time per month.
5. The unemployed must not be terminated from employment thanks to:
   • Dishonest on duty
   • Commission of criminal offense to the detriment of the employer
   • Serious infringement upon working rules, or regulation or lawful working order
   • Abandoning the duty for 7 days consecutively without good reasons
   • Recklessness which causes serious harms to the Employer
   • Having been sentenced to imprisonment by Court judgment.
6. Must not be the person entitled to old age benefit.
7. Shall be entitled to receiving the benefit starting from the 8th day from the date of unemployment with the last employer.
8. Is not a voluntary insured under Section 39.

The Entitlement Benefits you shall receive:

In case of termination of employment:

• Unemployment benefit for not more 180 days per year at the rate of 50 % of the wage calculated on the basis of maximum contributions of 15,000 Baht.

In case of resignation:

• Unemployment benefit for not more than 90 days per year at the rate of 30 percent of the wage calculated on the basis of maximum amount of contributions but not more than 15,000 Baht shall be payable. If in the duration of 1 year, there was more than 1 application for the unemployment benefit, the counting of the unemployment benefit receiving period in total shall not exceed 180 days; the compensation benefit for loss of income shall be paid on monthly installment basis by crediting to the Bank Account as notified by the Insured.

Evidence to be used in Applying for Compensation Benefit

• Application Form for Unemployment Benefit (SorPorSor. 2-01/7)
• The Citizenship Identity Card
• One photograph of 1â€� in size
• Employment Certificate or a copy of the resignation letter of the Insured (SorPorSor.609). In the event of unavailability of the Form SorPorSor. 6-09, application for registration of unemployment can also be made.
• A letter or an order from the employer terminating the employment (if there is any).
• A copy of the first page of the Bank Savings Account on which the Account Name and the Account Number belonging to the Insured are shown.

PROCEDURE AND METHOD OF APPLYING FOR COMPENSATION BENEFIT

1. Must apply for registration of unemployment at the Office of Employment, the Department of Employment.
2. Complete the Registration of Unemployment Form together with the following evidence:
   • The Citizenship Identity Card
   • One 1â€� photograph.
3. Complete the Application Form for Unemployment Benefit together with the following evidence:
   • Letter of Termination of Employment or a copy of the Notice of Leaving Employment (SorPorSor.6-09) or a letter or an order from the employer terminating the employment (if there is any).
   • A copy of the first page of the Bank Savings Account on which the Account Name and the Account Number are shown.
4. The officer of the Employment Office shall conduct an interview/ an inspection of the qualification and records of employment.
5. The officer of the Employment Office makes available job vacancies in 3 locations for the unemployed insured to choose.
6. If a suitable job can not be found, the officer of the Employment Office will coordinate the effort by sending the unemployed insured to receive vocational (skill) training as necessary. If the insured returns to work in the same place of business or refuse the work or job training provided and fails to show up as required, the Office of the Social Security shall suspend the payment of benefit immediately.
7. The officer shall enter the status of the insured in the case of unemployment in the central database.
8. The officer of the Office of Social Security shall retrieve information on the unemployed insured for a review according to the terms of entitlement.
9. Having had complete qualification, the Office of the Social Security shall transfer the compensation benefit for loss of income according to the Insured’s entitlement through the Insured’s bank account once a month via 8 commercial banks, namely, Krungthai Bank Plc; Bank of Ayudhya Plc; Bangkok Bank Plc; Siam Commercial Bank Plc; Kasikorn Thai Bank Plc; Thai Military Bank Plc; Siam City Bank Plc ( commencing 1 October 2006) and The Islamic Bank of Thailand (commencing 1 January 2007).
10. If the Applicant for compensation benefit is not satisfied with the order for the compensation benefit payment, an appeal can be filed within 30 days of receipt of the order.

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Loy Toy

I know of a few major Multi-National companies who set up their Multi-Million Dollar plant upgrades in Malaysia and Vietnam when that plant was originally ear-marked for Thailand.

Let's wait and see what pans out as only time will tell.

Butterfly

I think they are making a killing, at least the big corps

maybe they will limit the wage increase to the big companies with more than 500 employees

buriramboy

How can any employer argue against paying 300 baht (£6) for a days work??? Say people are working a 6 day week, still only 1800 baht a week or 7200 baht a month, hardly a liveable wage even for low class Thais with a family.

Butterfly

they spread their risk in the region, SOP when you can afford it

the wage increase will not be enough for them to move facilities, it's fucking peanuts for them

they might shift more OT to other regions though,

Butterfly

from my discussion with a few SET listed companies CFO, they all have been expecting the wage increase and didn't make much fuss about it, they understand perfectly the situation

it might impact OT for employees though, maybe less of that

Loy Toy

I know of at least 4 other large local component manufacturing companies who supply parts to the bigger corps and their machines are mostly idle because the orders are not coming.

Vietnam and Malaysia stand to win big if she passes these election promises and I can tell you they are watching Thailand very closely.

jizzybloke

They are but the bean counters will always look for ways to increase profitability and if that means a move then so be it!

Loy Toy

The problem is mate, that's an increase of around 35% and they have to factor that into their new manufacturing costs making them a lot more expensive then other companies in neighbouring countries.

Then everyone else will want an increase.

Malaysian and Vietnamese wages (not to mention China and India) are on par or even cheaper wages then Thailand plus the factory running costs are lot less particularly for electricity and fuels.

socal

Minimum wage laws create unemployment and a decrease standards of living. Singapore has no minimum wage laws as far as I know..

The minimum wage laws price companies out of the labor market. If a company can only afford to hire by paying a worker $5 an hour but the govt says you must pay $6, then that company has a negative return on labor. The company will be out of business and that job will not exist.

This is why, in the US, you have to pump your own gas, you dont have people carry your luggage at airports anymore, more automated tellers and clerks ect. The minimum wage laws make automation cheaper then labor. Everyone loses. People with experience and skills or an education (people that are worth more then low wages) have to work harder and enjoy less luxury and the unskilled people cant get jobs because the government makes it illegal for the more productive people to hire them.

socal

It costs nothing to live in Thailand, they are not starving. I bet a Canadian on minimum is poorer then a Thai when you consider living costs. Average price of a house in Vancouver is $818,000, price of 12 beer is $25.

English Noodles

Neither does Germany, Italy, Hong Kong (except for foreign workers), Austria, Malaysia, Finland, Denmark, Iceland, Norway, Sweden.

socal

35% ? !!

That's insane. That will send the baht down. I didnt expect this resurgence of socialism. It will do damage to the baht. Im changing my outlook on baht from a buy to a hold.

Butterfly

^

buriramboy

On your next visit you try and live on 7200 baht a month and report back on how great your life is.

Butterfly

he probably can, and the rest he spent on whores and katoys

sabang

I think the political turmoil of the last five years is the prime cause of that. Also, we are increasingly hearing foreign investors complaining about the lack of skilled labor and decent education & vocational training in Thailand. In that regard, the bumi's & viet's are eating our lunch.

There are 'minimum wages' and there is 'competitiveness' and they are not the same thing. A hike in minimum wages is required just to maintain historical living standards, given the domestic inflation here. I don't know what PT's specific policy is, but I doubt they would announce a 35% hike in one go- it would likely be phased in over a period of time. In terms of 'competitiveness', minimum or average wages are certainly a part of that, although oft overstated by employers & lobbyists for self serving reasons. I think a considerably more enlightened approach to addressing the competitiveness issue would be to improve the abysmal education standards here, but sadly no party addressed that as part of it's electioneering.

From a 'macro' perspective, the domestic (as opposed to multinational) business lobby has pretty much had it's own way in Thailand. On the one side they benefit from domestic protectionism- many if not most domestic industries here are basically cartels. This means the domestic consumer pays more for a lesser quality product, be that in banking, tobacco, booze, whatever. I can buy Vietnamese cigarettes in nearby Laos for 9bht a packet- and they are considerably better in terms of both packaging and quality than those pushed out via the Thai tobacco monopoly at 45bht a packet and more. Someone is making a lot of money, at the consumers expense.

Protectionism is often justified because it 'enables' companies to pay their local labor at decent rates, but this is manifestly not the case in Thailand. So domestic business benefits both ways- protectionism enabling them to keep their prices & profitability high, their quality & re-investment low. Low wages also help keep their costs low, and of course further enhance profitability. Plus of course the legions of foreign workers in Thailand from Laos, Cambo & Burma- who, more often than not, are being employed illegally. Someone is being rewarded to studiously look in the other direction, but of course this top level collusion is very much a part of the Thai way of doing things- and it is expressly for the benefit of a Few.

The third leg of the pyramid is tax collection & revenue, which at 17% of GDP is very low in Thailand by any international standards. It is obvious who this benefits- just look at the obscene wealth differentials here, and even they are understated.

So really, if we are to focus on a competitive future vision for Thailand, minimum wages are a small part of the equation. Education, tax collection, and a systematic lowering of punitive tariffs and other barriers to competition are considerably more critical, and of course a relatively stable, sustainable political system- which (perhaps) we are getting towards now.

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