Thread: Minimum wage to increase by April 2011

Originally Posted by The Bold Rodney

Originally Posted by teddy

Then why do they use a calculator in shops and bars to calculate the change from a 100 baht note for a 80 baht bottle of beer?

Exactly right but.....

Originally Posted by Buksida

Check the literacy rates

Ahh well certainly not worth debating this with ex-spurts like "buksida" who obviously knows better because he's read the statistics produced here!

About a year ago I needed to buy a load of potting soil. The wife and I arrive at a big garden center and see that they have a special deal; six bags of potting soil for 100 Thb. Excellent; so we tell them we need 40 bags...how much? 800 Thb they say. Wait a minute I say. You are charging me more per bag for buying 40 bags than if I only buy six? Now this causes consternation like you would hardly believe. We end up standing in the hot son with no less than four "managers" all with calculators. Finally the most senior manager says in triumph...OK we can discount for you...750 Thb for 40. But that's still more expensive I say.....dear me.

So then I have an idea. OK I say; just give me 6 bags for 100 baht. They summon a non-management type and had him load the six bags into my truck and I hand over 100 Thb...then I say OK now give me six more...I hand over another 100Thb....we did this 7 times and I paid a total of 700 baht.

We drove off with 42 bags of soil while the 4 managers, still standing out in the hot sun furiously calculating away and trying to figure out how that farang managed to rip them off like that....

Originally Posted by koman

So then I have an idea. OK I say; just give me 6 bags for 100 baht. They summon a non-management type and had him load the six bags into my truck and I hand over 100 Thb...then I say OK now give me six more...I hand over another 100Thb....we did this 7 times and I paid a total of 700 baht.

We drove off with 42 bags of soil while the 4 managers, still standing out in the hot sun furiously calculating away and trying to figure out how that farang managed to rip them off like that....

awesome story, yes, technical details are not their strong

Pheu Thai Party Secretary-General expects to start increasing the minimum salary to 15,000 baht per month for civil servants and state-enterprise employees in October.

As for an increase to the minimum wage rate, he said the policy will be put into effect once the government has reached a conclusion with the private sector and prepared measures to assist companies in managing the higher payroll, such as a cut to the business income tax and promotion of exports to emerging markets.

The minimum wage increase is expected to be implemented next year.

PT will start giving bureaucrats 15k, but the poorest ppl will have to wait until next year to get less than half that? Anything could happen between then and now, especially considering they are talking to employers first.

Originally Posted by StrontiumDog

The pledge to raise the minimum wage to Bt300 in 90 days

Was this really a pledge? If so looks like they're going back on it already.

Originally Posted by Buksida

Originally Posted by teddy

Originally Posted by Buksida

Rodney, you have no idea what your talking about.

Check the literacy rates, they are not that low. Basic maths is understood by most.

The why do they use a calculator in shops and bars to calculate the change from a 100 baht note for a 80 baht bottle of beer?

Because they're lazy I guess, as I've seen it done by grads.

Building workers don't have calcs and do OK. But can't read plans, to save face they pretend it's not necessary

Round here,they use a calculator so they can show the amount to the thick farang who doesn't understand Thai. Don't do for the Thais though.

Thai-ASEAN News Network



Southern Trade Union Worried about Wage Hike

UPDATE : 8 July 2011

A southern trade union is urging the government to run its wage policies with caution, given they could pose a severe threat to internal businesses.

Chief adviser of the Federation of Southern Industries Thawee Piyapathana said the push for a minimum-wage increase to 300 baht per day and the entry salary of a new bachelor graduate at 15,000 baht per month will do more harm than good if other factors are not considered.

Thawee said that business operators in the country will not be able to bear increased costs, while small and medium entrepreneurs could shut down their operations.


He suggested that the rise covers 60 percent of workers who rely on minimum wage.

The chief adviser then urged the new government to place importance on the country’s economic and business conditions before putting its economic policies in place, as they will be the group hardest hit by the government’s wage policies.

Thai-ASEAN News Network



Food Industry Prepares for Minimum Wage Hike

UPDATE : 8 July 2011

The food industry believes the new government's minimum wage hike will have a serious impact on production costs, but feels it will also help stimulate consumer spending, providing the political climate is stable.

The private sector has continually voiced opposition against the new government's minimum wage hike to 300 baht per day, including Thailand Restaurant News Magazine manager and organizer of the Thailand International Restaurant and Bar exhibition Chattaporn Yolao.


She said she has been closely monitoring the new government's wage policy, and if it is passed business operators will be deeply troubled.

She has urged the government to find solutions for the operators.

Regarding this year's growth in the food industry, factors such as a change in consumer behavior, with many people eating out, as well as political stability have contributed to an increase in consumer spending.

A 15 percent growth is expected this year.

The Thailand Restaurant News Magazine is cooperating with Impact Exhibition Management to hold the 2011 Thailand International Restaurant and Bar exhibition, showcasing food and drink products from around the globe.

The exhibition kicked off yesterday and will continue until Saturday at Muang Thong Thani's Impact Terminal 2.

Some interesting comments on the minimum wage in this article :

BoT welcomes peaceful election



The peaceful election and the acceptance of poll results by leaders of both Pheu Thai and Democrat parties are positive factors in ensuring Thailand's international credit rating, Bank of Thailand (BoT) goverrnor Prasarn Trairatvorakul said on Friday.
Mr Prasarn said the country’s debt repayment ability will also be taken into account by credit rating firms.

He said if the populist policies of the incoming government do not cause a heavy fiscal burden it would also be a positive factor. The alternative would be a negative factor.

The central bank chief said he will have to wait for details of the policies on the end to the state levy on some fuels, the increase in the daily minimum wage and the fixing of a 15,000 baht salary for bachelor degree graduates starting government jobs before making further judgement of whether they would cause inflation or increase the ratio of public debt to gross domestic product.
Bank of Thailand governor Prasarn Trairatvorakul

Mr Prasarn refused to comment on reports that the Pheu Thai-led coalition government might interfere in foreign exchange policy, saying any comment he made could affect the exchange rate.

He said risk factors that could hurt the economy in the second half of the year are inflation, rising prices of oil and food, the fragile global economic recovery, particularly in the US, and the debt crisis in Europe.

The BoT governor said the bank maintained its economic growth projection for this year at 4.1 per cent.

Islamic Bank of Thailand (Ibank) president Theerasak Suwannayos said the Pheu Thai's 300 baht daily minimum daily wage policy will not hurt small and medium enterprises (SMEs).

At today's seminar on "Ibank: New form of Financial Institution for SMEs", Mr Theerasak said that before raising the daily wage to 300 baht related procedures and conditions were needed.

Workers eligible for the new wage rate must be trained to the level of skilled labour.

"In the past, we only talked about GDP growth and forgot to think of income distribution. This has led to a problem of economic inequality because the GDP has been growing but people are still poor," he said.

The Ibank president said that this was because the GDP growth occurred only in the industrial sector and the money had not reached the people’s hands.

He said the labour cost accounted for only 10 per cent of total production costs and if it werer increased it would not have much effect on business.

Of much more concern is the cost of raw materials, which account for 60 per cent of total cost, he added.

Pheu Thai's nominee for prime minister Yingluck Shinawatra said her party is taking into consideration the impact on all sides in finalising its economic policies.

Many people, both supporters and critics, have questioned Pheu Thai's economic policies heralded during its election campaign.

Ms Yingluck said her party might have been talking about ways to lower the cost of living during the electioneering, but it must clearly explain sources of revenue as well.

"To drive our economic policies, we must not be rash and the impact on all sides must be taken into account," said the 44-year-old businesswoman-turned-politician.

Bangkok Post : BoT welcomes peaceful election

New Thai Prime Minister Promises to Double Minimum Wage | Southeast Asia | English

July 08, 2011

New Thai Prime Minister Promises to Double Minimum Wage

Ron Corben
Bangkok

Thailand’s Prime Minister-elect, Yingluck Shinawatra, says the country’s new government will press ahead with election promises to double the minimum wage despite fears that the move will trigger inflation.

Yingluck says before the policy is implemented, she will hold talks with both business and labor. Speaking at a news conference, she said the government would gradually implement the policy and ease the impact on businesses through corporate tax rate cuts.

“The policy of the minimum wage we will do at the same time as reducing the corporate tax from 30 percent to 23 percent," the prime minister said. "But we have to sit down and discuss with all the business [sector]. So I won’t be launching or implementing ...concerning the impact so we have to sit down and gradually see how we can find a solution together.”

Campaign promises

The move to double the minimum wage to $10 a day (300 baht) was one of several populist election promises made by the Pheu Thai Party ahead of the elections. Pheu Thai won a landslide victory over the governing Democrat Party on Sunday and is preparing to form 300 seat coalition government in the 500 member parliament.

Thai labor groups say they have been assured the incoming government will go ahead with the increase in minimum wages.

Chalee Loisung, chair of the Thai Labor Solidarity Committee, says the government should implement the policy as soon as taking office. But he also said the government should avoid adverse impacts on the Thai economy.

Chalee said the government has told labor groups it stands by a promise to raise the minimum wage, which will help people have a higher standard of living. But he said while household incomes will rise, employers may also need assistance.

Positive feedback

Thavee Techatheerawat, head of the Thai Trade Union Congress, backed the government’s promises of higher wages, but said the ultimate negotiations will depend on who becomes labor minister.

He says the government has repeatedly said "we can do it" but labor groups will have to wait and see who will be appointed as labor minister and then the trade unions can negotiate.
Thai and foreign businesses have been more wary of the minimum wage increase because of the cost to their payroll and how it could lead to more inflation.

Nandor von der Luehe, chair of the Joint Foreign Chambers of Commerce, said the wage increases were widely cited by campaigning politicians, but can be achieved only with productivity improvements.

“All the [political] parties came out to increase the minimum wage. To increase the minimum wage is fine as long as you increase productivity. But if you only increase minimum wage without increasing productivity it does not work,” von der Luehe said.

The Pheu Thai-led government is also planning to follow through on pledges to increase funding for rural development programs. Economists have warned against using debt to fund generous spending programs that are aimed at boosting growth

Originally Posted by Sakeopete

Originally Posted by socal

Originally Posted by Loy Toy

Originally Posted by buriramboy

How can any employer argue against paying 300 baht (£6) for a days work??

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.

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.

I don't know much about economics but will the wage increase and 20k rice pledge increase inflation drastically? I don't think the wage increase will effect multinational companies but it will effect small companies who produce locally consumed products thereby increasing inflation.

If this happens the BOT will increase interest rates as a counter measure making the Baht more attractive. The Baht will gain hurting export businesses and expats.

We expats will be hit with a double whammy of inflation and forex to our spending power.

Depends if the expats are earning baht. If not then inflation and a rising baht just means that inflation is worse in the western currency then the baht.

The BOT needs a rising Baht to stop inflation. The soft peg that the BOT has with the dollar is the inflation. The more money the US prints, the more baht the BOT has to print to keep the soft peg. The less the BOT prints, the higher it will go (deflation)

Originally Posted by DrB0b

Tuesday, July 5, 2011

Are the banks urging Thailand to drink the Kool-Aid?

Somebody call a physician. Economists at some of Asia's leading financial institutions are suffering amnesia. Or worse.

First, some background. For a long time, economists have been urging leaders of emerging countries in Asia to shift from export-led growth strategies to domestic investment. They have preached spending on infrastructure and the stimulation of local demand. Here's an article dated May 2009:

ASEAN: ADB urges Asia to increase domestic spending

The Asian Development Bank (ADB) President Haruhiko Kuroda told ASEAN, East Asian and South Asian officials at the ADB’s annual meeting in Bali, Indonesia that Asia must boost domestic consumption and end its dependence on exports as external demand plunges in the world economic slump....

Although Asian governments have embarked on economic stimulus packages, Kuroda said such measures would not be enough without structural reform to end the region's dependency on demand from rich countries.

Over the longer term, developing Asia is starting the process of rebalancing growth from excessive dependence on external demand to greater resilience on both consumption and investment," he said.

What was good advice in 2009 ought to be good advice in 2011. This year, nobody expects consumer demand in the US or Europe--regions plagued by unemployment--to rebound anytime soon. The insatiable appetite of Western leaders for draconian fiscal austerity is reducing consumer demand, and may push the world's richest economies back into recession soon. Thus, if Asian economies are to prosper, their leaders have never had more reason to focus on stimulating local demand.

Or so one would think. Today the Wall Street Journal reports that the Bank of Thailand and various international banks are warning that if the incoming government of Yingluck Shinawatra follows through on its plans to increase domestic spending, this will have harmful consequences. They are sounding alarm bells about a rise in Thailand's national debt and an increase in the rate of inflation:

New Populist Policies Could Harm Thai Economy

BANGKOK—A sweeping electoral victory for Yingluck Shinawatra has allowed Thailand to avoid the immediate risk of social unrest or military intervention, but the incoming government's populist policies may threaten the vibrancy of Southeast Asia's second-largest economy.

The sister of exiled former Prime Minister Thaksin Shinawatra wooed voters not only with her charisma, but with an array of vote-grabbing promises: an increase of 36%-89% in the minimum wage, guaranteed rice prices for farmers, starting salaries of at least 15,000 baht ($492) for university graduates, tablet PCs for students, and high-speed trains across the country.

"Even if they only deliver a fraction of what they promise (on wages), the impact will be significant" on inflation, said Santitarn Sathirathai, an economist with Credit Suisse in Singapore.

A few days before the election—with both parties promising to raise the minimum wage—Mr. Santitarn raised his average inflation target for 2012 to 3.7% from 3.5%.

The way the government implements any minimum-wage increase will be crucial: An across-the-board increase "will be very inflationary," Mr. Santitarn said, but a varied introduction across sectors would limit the impact on inflation, which rose 4.06% in June from a year earlier.

The Bank of Thailand has warned that inflation poses the biggest threat to economic growth this year. Gov. Prasarn Trairatvorakul said during the election campaign that the next government needs to maintain fiscal discipline and that increasing the budget deficit could threaten fiscal stability.

Standard Chartered Bank wrote in a research note that the For Thais party had indicated its economic policies would cost around 1.85 trillion baht over the next five years, a level of spending that could push back plans to achieve a balanced budget by two years, to fiscal 2018.

Although Thailand's public debt of about 45% of GDP "is not yet at alarming levels, the big-ticket investment could imply larger demand for public borrowing over the coming years than markets had expected," Standard Chartered said.

Despite the calls for fiscal discipline, the new government will face enormous pressure to make good on its promises...

Let's hope that Thailand's new government ignores the fear-mongering of international bankers and the Bank of Thailand governor. Even a substantial increase in a national debt that, as a percentage of GDP, is only half that of the United States, will not spell ruin for Thailand. Moreover, modest inflation can discourage hoarding and stimulate productive investment.

Thailand may well be on the verge of pursuing an economic growth strategy that would not only be advantageous for poor and middle class Thais, but good for the world economy. Thailand might set an example for other countries.

I would tend to chalk up the Wall Street Journal article as a reflection of the present global hysteria for "fiscal discipline now at any price." This economic dogma has been demonstrated to serve bond-holders at the expense of workers.

Incidentally, I found another version of the comments made by Gov. Prasarn Trairatvorakul, cited above, at MSNBC:

Thailand risks slipping into a fiscal crisis as in Western economies, eroding consumer power if the new government substantially expands fiscal spending as many parties are promising, warns Bank of Thailand governor Prasarn Trairatvorakul.

If Gov. Trairatvorakul actually believes that Western economies are suffering from "a fiscal crisis" as opposed to crisis of consumer demand and unemployment, then we can be quite certain he's drinking the Kool-Aid.

It is very easy to spur domestic demand. Let the Baht rise so that commodities priced in dollars get cheaper for Thais and incrementally more expensive for westerners. When commodities get cheaper, Thais have more discretionary income to consume their own production.

Basic macro.

Originally Posted by Sailing into trouble

Originally Posted by 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.

Are Thai people starving? Is this the measure that you hold up as justification for your Argument?


Your Home province of BC has a minimum wage. A minimum wage that is very low. But it is a minimum wage mandated by government. The right wing provincial government has now taken action to increase the minimum wage of workers. Since you use Canada as an example it is interesting that in Canada, BC is within 5c the lowest minimum wage. Unfortunately for your thesis the provinces with the highest minimum have generally a higher GPP. It is also interesting that this very conservative BC government is raising the minimum wage by about 15% this year.

People on or well below the poverty line don't have disposable income. That means less profit for business that, means less of us can afford beer and houses. When that situation grows it often snowballs and is then called a recession. The balance is to have a sustainable society that can develop economic and social policy that compliment.

In a volatile country like Thailand overseas investors look at many factors not just a 0.% increase in the cost of manufacturing a refrigerator or car. Political stability, settled work population, educated work force, access to domestic and foreign markets transportation costs etc etc. If Thailand is to compete against its increasingly economic powerhouse Asian Neighbors, it needs to force itself from the dark ages of the present feudal serfdom.

If that means that your choice of night partners diminishes as more Thais find alternatives to Farang dick to make a living; tough tity

Abolish all minimum wages. They are market distortions. Economic juggernauts like Singapore and Germany have no minimum wage.

The general population dont have a clue about how economics. Considering all this wage talk, are you aware that Germany and Japan have higher wages then the United States yet they both have trade surpluses with China ?

Originally Posted by The Bold Rodney

Originally Posted by Carrabow

That would cut into the Executives annual bonuses, who is kidding who ?

Exactlty!

As this proposal only applies to companies who employ more than 50 employees it simply means the greedy employers will make less profit. Of course many will shout "International Corporates will pull out and move to other countries" and yes that could happen just like it has in Europe.

So for example Nokia, Siemens etc. etc. can't afford to pay 300 Baht for a 12 hour shift?

Yes exactly who is kidding who?

clueless, Germany and Japan have higher wages then the US yet they have trade surpluses with China who has lower wages then Thailand.

Economics is not a guessing game. Most people dont even know some basic definitions.

Originally Posted by teddy

If you drive along the unnamed road that links Chiang Si Phom corner with the superhighway in Chiang Mai in the morning, you'll see hundreds of Tai Yai illegal labourers standing by the side of the road waiting to be collected and used as casual labour. The numbers have increased significantly over the last few years. I guess they have replaced Thai workers on the minimum daily rate.

To think that raising operating costs of Thai businesses by at least 35% will lead to a workers utopian paradise is naive. Jobs are going to flood out of Thailand and as long as there is uncertainty over a minimum wage policy of 300 baht per day, investment will dry up.

It might be tough for Thais to live on 7K baht per month but they are used to it. Take away the 7K because they have no jobs will be worse. If they are really desperate, they will find a dumb farang to marry one of their lazy, whoring and gambling-addicted skanky daughters. If they weren't lazy, incompetent, poorly-educated and corrupt, then they might be able to produce a wealth factory such as Singapore. That isn't going to happen though within the life span of our universe.

It's horses for courses: Thais have been born to be peasants and Chinese have been born to exploit them. I'd rather be with the Chinese.

with the right policies it could easily happen in 10 to 20 years. Compare east and west Germany back in the day. North and South Korea. Taiwan vs mainland China.

Originally Posted by teddy

Originally Posted by Buksida

Rodney, you have no idea what your talking about.

Check the literacy rates, they are not that low. Basic maths is understood by most.

The why do they use a calculator in shops and bars to calculate the change from a 100 baht note for a 80 baht bottle of beer?

whoooo i am sure if they could do it in their head, it would make them worth $40 an hour ?

AFP: Thailand set for return to 'Thaksinomics'

Thailand set for return to 'Thaksinomics'

By Janesara Fugal (AFP) – 7 hours ago

BANGKOK — Riding a wave of support among rural voters, Thailand's incoming premier plans a raft of populist measures to narrow the rich-poor divide, at the risk of higher inflation and public debt.

A rise in the minimum wage, increased rice prices for farmers and free tablet computers for primary school students are some of the promises that helped propel former premier Thaksin Shinawatra's Puea Thai Party to victory.

The one-time billionaire telecoms tycoon, who was ousted by the military in 2006 after five years in power, is adored by Thailand's rural poor for his populist policies such as cheap healthcare and microcredit schemes.

Now his sister Yingluck is set to follow in his footsteps as Thailand's first female premier, marking a return to her brother's expansionary policies targeting the rural poor that came to be known as "Thaksinomics".

"The concept of the policies is good because it focuses on how to resolve the vicious circle of poverty," said Thanawat Pholwichai, head of economic forecasting at the University of the Thai Chamber of Commerce.

"But Puea Thai has to implement it carefully," he added.

Thailand has made great strides in reducing poverty, with 8.1 percent of the population living below the national poverty line in 2009, one of the lowest rates in developing Asia, according to the World Bank.

But there are significant inequalities in the distribution of wealth, particularly between Bangkok and the rural northeast, the heartland of Thaksin's "Red Shirt" supporters.

The richest 20 percent of Thai households account for nearly half of total household incomes, the Asian Development Bank estimates.

"When people have more income they will spend more and that will boost the economy," Thanawat said. "But it is also risky. There are concerns that Puea Thai's populist policies will cause higher inflation."

Inflation in Thailand is relatively contained for now at about four percent, lower than the levels in many other Asian nations.

But growing price pressures could lead the central bank to extend its series of interest rate rises -- attracting more capital inflows, driving up the value of the baht and affecting the competitiveness of exports, analysts said.

The effects of Yingluck's policies are likely to be felt further afield than just Thailand, the world's top rice exporter.

She has promised rice farmers a minimum price of 15,000 baht per tonne, much higher than the current market price of less than 10,000 baht.

"It will be the highest rice price in the world," said Korbsook Iamsuri, director of the Thai Rice Exporters Association.

"It will definitely affect our exports. With this price, we can sell our white rice only after Vietnam sells all its rice," she told AFP.

There are also concerns about the impact on Thai companies of a proposed 40-percent increase in the daily minimum wage to 300 baht, about 10 dollars, although the impact should be cushioned by a cut in the corporate tax.

The biggest worry is for small and mid-sized firms, the bedrock of the Thai economy, said Mark Monson, a fund manager at Vienna-based Raiffeisen Capital Management.

"Their margins are thin already. Will they have to fire people? It could put pressure on job and labour growth," he warned.

For now investors appear largely unfazed: Thai stocks surged 4.5 percent last week as news of a decisive win by Puea Thai in the July 3 vote raised hopes of a return to political stability after years of turmoil.

The Thai baht also rose sharply and extended its gains after Yingluck, who is widely seen as Thaksin's political proxy, said the value of the currency would continue to be determined by market forces.

Jitters about the new policies are tempered by optimism about the robust health of the Thai economy, despite years of political unrest and a series of sometimes-bloody opposition street protests.

Thailand's export-dependent economy grew 7.8 percent in 2010 and there are hopes that rising incomes and consumer spending will boost tax revenues, easing pressure on the public finances.

Analysts estimate Puea Thai's proposed policies, which also include a planned high-speed rail network and free Wi-Fi in public places, will cost about 60 billion dollars over the next five years.

But with public debt at manageable levels, a bigger concern for many investors is that Thailand's fragile political calm may prove short-lived.

The outgoing ruling party is seeking the dissolution of Puea Thai on the grounds that banned politicians were involved in its election campaign.

Any attempt to remove Thaksin's allies from power yet again could trigger another round of street protests, in a fresh blow to the key tourism sector.

Bangkok Post : Govt wage plan faulted

Govt wage plan faulted

Percentage rise kinder on economy, says expert

• Published: 11/07/2011 at 12:00 AM
• Newspaper section: News

The government should increase minimum wages in percentage terms to better reflect productivity, says a labour expert at the Thailand Development Research Institute.


Abhisit begins his farewells Outgoing Prime Minister Abhisit Vejjajiva waves to supporters at a gathering in Ekkamai yesterday. The gathering was organised by social networkers to give him moral support following the Democrat Party’s defeat in the July 3 election. PATTANAPONG HIRUNARD

Yongyuth Chalaemwong, the TDRI's labour development research director, says the government should scrap its policy of increasing the daily minimum wage to 300 baht a day, which could hurt employment in provinces where productivity is lower than wage rates.

The government should raise the minimum wage rate in percentage terms depending on the province, or increase it by 70% nationwide instead of fixing the wage hike at 300 baht a day, he said.

The proposed 70% increase would help ease the pressure on the government's wage policy.

Wage rates vary by province. A 70% increase would take the minimum wage rates in central provinces and Bangkok to higher than 300 baht.

Workers in small provinces with low industrial productivity will also receive higher wages even though the figures may still be lower than 300 baht, Mr Yongyuth said.

The average minimum wage nationwide is 175 baht a day and if the minimum wage increases by 70%, the new average wage will be 297.5 baht, which is close to the 300 baht figure promised by the Pheu Thai Party, which is forming the next government.

The minimum wage ranges from 159 baht a day in Phayao to 221 baht in Phuket.

Pheu Thai's proposed 300 baht a day wage is 50-90% higher than current rates.

This has raised concern among academics and businesses that the policy would force many entrepreneurs out of business as they would be unable to afford to pay the higher wages.

Some fear the policy could also increase inflation, although Pheu Thai has promised to offset the impact of higher minimum wages by cutting the corporate tax rate from 30% to 23% by next year, and 20% by 2013.

Mr Yongyuth said a 300-baht flat rate increase across the country would fail to encourage productivity of small provinces where wages paid are higher than worker productivity.

He said a study had found that wage rates in the central region and Bangkok are lower than productivity while wage rates in the North and the Northeast are already suitable.

Meanwhile, Amnart Nanthaharn, deputy secretary-general of the Federation of Thai Industries, said the FTI will meet the government to discuss possible repercussions which its wage policy could have on the businesses.

Mr Amnart said the government must come up with measures to help entrepreneurs.

He also suggested the government announce new special economic zones in border provinces to help labour intensive industries which demand foreign workers.

Special labour measures should be put in place to govern employment of foreign workers there, he said.

Somsuk Kongkachen, vice-chairman of the Samut Sakhon industrial council, said the proposed 300 baht minimum wage is also likely to cover foreign workers, which could hurt businesses employing them.

The government should be aware of the risk, he said

Bangkok Post : Don't count on it

Don't count on it

Employers say they can't just wave a magic wand and push up salaries overnight, and neither can the new government.

• Published: 11/07/2011 at 12:00 AM
• Newspaper section: Business

A starting salary of 15,000 baht a month is an appealing prospect for a young university graduate. But most entry-level jobs now pay far less _ between 9,000 and 12,000 baht on average _ and both job-seekers and employers don't see salaries rising any time soon.


Young people check job listings online at the Bangkok Career Expo 2011 held on Friday and Saturday at the Queen Sirikit National Convention Center in Bangkok. KOSOL NAKACHOL

At the recent Bangkok Career Expo 2011, interviews with 83 participants indicated that the new Pheu Thai government would not find it easy to make good on one of its most high-profile election promises.

From the standpoint of employers, if starting salaries are regulated, businesses would have to adjust their salary scales across the board, resulting in higher costs and potentially affecting the competitiveness of their businesses and of the country.

A human resources officer of a well-known hospitality company said politicians could say anything to win votes but they didn't care whether a policy was practical or not.

"If we pay a salary of 15,000 baht for new staff, the question is how about our existing staff holding the same degrees and earning only 12,000 baht?" he asked rhetorically.

"Do we have to tell them that you should resign and reapply again if you want a new salary? It's nonsense. I think the government should think of a solution for operators, especially small and medium-sized operators. A policy needs clear details before it's launched."

Pheu Thai economic strategists insist the impact of higher staffing costs would be offset by a promised reduction in corporate income tax from 30% to 23% by next year and 20% by 2013. However, most executives surveyed by the Post said such reductions would benefit big companies but not small ones.

Pavorn Maleehom, a human resources officer with Tesco Lotus, believes salary should depend on work experience. The average starting salary at the hypermarket chain is currently 13,000 baht _ it was just increased from 12,000 baht last month.

"We think it would be difficult to follow the proposed policy," said Mr Pavorn. "It's not just a case of offering a new salary base to new bachelor's degree holders. We would have to adjust the rates for the majority of our staff. So we have no idea how the policy could be implemented next year."

Young job seekers, while encouraged by the possibility of earning more, were equally sceptical about the Pheu Thai promise materialising.

"I'm looking for a job related to financial accounting. As I talk with many companies here, the average salary for new bachelor's degree holders is about 10,000 to 12,000 baht. My friends and I will accept the offers and we have a forlorn hope of getting 15,000 baht as promised by the new government," said Nuchaporn Songsiri, who will graduate from Siam University in two months.

Maybe in five or 10 years a salary of 15,000 baht would be practical, she added with a smile.

A law student at Thammasat University said she believed 15,000 baht was appropriate given the current cost of living, but that no employer could offer such an attractive salary.

"I think 12,000 baht per month can be possible for us. We have no experience. If we request a high salary, it will be difficult to find a job," she said.

Pawarisa Bunnut, a recent Liberal Arts graduate from Rangsit University, said she expected a monthly salary of 15,000 baht.

"I know that it's a policy of Puea Thai for new graduates, and I think they will be able to implement it but I didn't choose them anyway," she said.

Piyamitn Rangsitienchai, chief executive at the local recruitment firm Prompt Professional Resources & Services, said salaries of 15,000 baht were up to 50% higher than current average levels. "If the private sector was forced to pay such a high rate, employers may change to hiring more freelancers rather than paying salaries for a whole month to employees whose working days are not 30 days in each month," he said.

Another HR specialist said offering a flat rate to all graduates regardless of position or job description may create unfairness as some positions require candidates with more complex skills.

"An engineer or a medical adviser would certainly require a different skill set from candidates filling a general administration job. If the pay is equal, it would have an impact on morale in the long term," she said.

Performance-based pay so positions demanding complex skills should offer a premium rate is more appropriate because students are motivated to choose fields of study that match the country's strategic development plan, said the specialist.

She is also worried about employers' ability to pay as personnel costs generally account for the largest portion of expenses in most organisations. A sharp rise in salaries would certainly diminish profitability, which would also reduce the benefit of a lower tax rate on corporate profits, she added.

a rise in the baht is a raise.

Originally Posted by StrontiumDog

A human resources officer of a well-known hospitality company said politicians could say anything to win votes but they didn't care whether a policy was practical or not.

"If we pay a salary of 15,000 baht for new staff, the question is how about our existing staff holding the same degrees and earning only 12,000 baht?" he asked rhetorically.

"Do we have to tell them that you should resign and reapply again if you want a new salary? It's nonsense. I think the government should think of a solution for operators, especially small and medium-sized operators. A policy needs clear details before it's launched."

No wonder they have issues...tell me where common sense plays into this equation?

Thai-ASEAN News Network

300 Baht Minimum Wage Must Be Gradually Implemented

UPDATE : 12 July 2011

Even though it has only been about a week since the election, the Pheu Thai Party is already starting to feel the pressure. This is because some of the Pheu Thai’s campaign promises have been so well received by most workers and farmers. At the same time, many have raised concern that the feasibility these populist polices might be limited by state budget and economic conditions.

A number of economists from the private sector believe that the Pheu Thai could only implement between 40 to 50 percent of its campaign pledges. They have pointed out that many of these policies could bring severe economic repercussion; especially the 300 baht per day minimum wage which has brought doubt among the public after former Prime Minister Thaksin Shinawatra said that “it might only be initiated in Bangkok”.

The minimum wage policy may not be the only promise that the new administration might not be able to keep. The other policies such as the 15,000 baht monthly salary for all college graduates may only be applicable only for state employees, not for everyone as boasted during the campaign. There is a valuable lesson that all political parties could learn from these campaign promises. They need to make sure that they can deliver before making any kind of promise. We need to punish the politicians who are irresponsibly making false promises aimed only to garner votes. Everyone in society, including the politicians, must be held accountable.

It may seem easy to implement the 300 baht per day minimum wage policy. If looked at closely, the policy itself is quite complex and could bring serious economic consequences, particularly on medium and small enterprises. Anyhow, we concur that it should be initiated in Bangkok and Phuket before expanding to other parts of the country. By looking at the current economic structure, the Thai work force deserves higher wages. However, the pay increase should take place in chorus with vocational skill development in order to raise overall national productivity.

Furthermore, the wage boost must be supported by a sound plan. The Office of Small and Medium Enterprises Promotion has calculated that labor cost accounts for about 16.2 percent of the total production cost for small and medium enterprises, meaning that a one percent increase in labor cost would raise these businesses’ production costs by 0.16 percent.

It has been estimated that there are about 3.3 million workers in the Bangkok Metropolitan area. If minimum wage is increased to 300 baht per day, the small and medium enterprises will have to shoulder 39.5 percent increase in labor cost and 6.4 percent in other associated costs. By looking at the major provinces with high employment rates, it has been discovered that Roi-et and Khon Kaen provinces would have the highest wage and production cost increase while Phuket would have the lowest.

From a survey conducted throughout various industries, among the businesses which would be most affected by the wage hike will be the wicker furniture manufacturers which would have to bear a 10.2 percent in production cost increase followed by gemstone cutting with a 7.6 percent, garment and leather accessories with 7.3 percent.

Therefore, the 300 baht minimum wage must be thoroughly deliberated before it is gradually implemented from the most prepared industries along with a clear strategy on foreign labor.

Taken from Editorial Section, Krung Thep Turakij Newspaper, Page 2, July 12, 2011

Translated and Rewritten by Kongkrai Maksrivorawan

Wage fund planned to aid SMEs: Jaruphong

Wage fund planned to aid SMEs: Jaruphong

By THE NATION
Published on July 13, 2011


The proposed Bt300 minimum daily wage will not cripple small and medium-sized enterprises as feared by employers and the public, because a fund will be initiated to provide SMEs with interest-free loans, Pheu Thai Party secretary-general Jaruphong Ruengsuwan said yesterday.

A survey will be soon be launched to find out how many SMEs pay their workers less than Bt300 and how much money would be needed to support them, Jaruphong said.

The Bt300 wage was one of Pheu Thai's major campaign promises during the election that it ultimately won, but businesses and academics have warned that it is impractical and unproductive for the entire economic system.

Although former prime minister Thaksin Shinawatra, the de facto Pheu Thai leader, recently said the Bt300 wage would be paid only in Bangkok and not elsewhere, Jaruphong said only that the flat-rate policy would become "clearer" once the new Cabinet was set up.

Chalee Loisoong, a labour leader, said Pheu Thai would be a liar if the Bt300 wage could not be enforced uniformly across the country as its candidates had boasted during their election stumps.

The party also guaranteed a minimum entry-level salary of Bt15,000 a month for new university graduates.

The increases in the minimum daily wage agreed upon by the Tripartite Wage Committee for 35 provinces, ranging from Bt2 to Bt28, should also be immediately approved before the Bt300 wage goes into effect next year, Chalee said.

"Workers would all starve if they had to wait for the hike to Bt300 in January."

^ This isn't sounding good at all.

Government to prop up businesses so it can implement its policy....

Ambiguity over whether the 300 Baht will be nationwide....

Pheu Thai need to sort this out or it is going to go tits up.