Minimum wage to increase by April 2011

**Gerbil** · 13-07-2011, 01:04 AM

^ I think we need a "PT - The broken election promises" thread, to keep score of all the policies that they promised which get changed or dropped. Not in News, obviously though.

Candidates so far:

1. 300 baht minimum wage - whoops, sorry Bangkok only, just to reward all those people there who voted for us (oh, that's right, they didnt did they?)
2. Tablet PCs for every school child - ah, sorry again. if you're already in school then tough, it will only be the 4-5 year olds starting school who get them.

P.S. Exclusive first shots of the tablet 'PC' to be provided:

**StrontiumDog** · 13-07-2011, 12:43 PM

Thai-ASEAN News Network

Property Associations Against Wage Hike

UPDATE : 13 July 2011

Thailand's three major property associations are submitting a letter to the new government detailing the impacts of the wage hike policy on the property market.

They say it will cause production costs to spike, instantly raising home prices by 10 percent.

Three property associations, including the Real Estate Association, the Thai Condominium Association, and the Housing Business Association has prepared to submit a letter to the new government explaining the impacts of the national policy to hike the minimum wage to 300 baht per day.

The Real Estate Association Chairman, Kittiphol Pramote Na Ayuthaya said the wage hike policy will cause widespread damage to the property sector including construction costs and property prices.

Labor cost makes up 30 percent of all production costs for single houses and 20 percent for condominiums, and the remainder goes to construction materials and land.

Kittiphol warned that small and medium operators are those with the highest production costs, and by raising the minimum wage, prices of homes will instantly jump by 10 percent.

The Thai Condominium Association Chairman Thumrong Panyasakulwong said that the labor payment rate is currently 25 percent, or 250,000 baht for constructing a home worth one million baht.

And if the minimum wage rises from 215 to 300 baht, the rate will become 40 percent causing the home prices to go up by 100,000 baht.

He urged the new government to carefully consider a gradual rise instead of a one-time hike, so that operators are able to adapt to the changes.

He also noted that the policy to cut business income tax will not help reduce high production costs as not all companies enjoy lucrative revenue to benefit from the tax-cut.

Real estate operators agree that the five-year-zero-percent mortgage rate will help stimulate the property in the second half of the year and should not create a bubble economy due to the high demand of private residences and strong consumer purchasing power.

The property market saw a dip in registration for March 2011, dropping by 39 percent compared to the same time last year and 170,000 new house registrations will be expected this year.

According to property figures, the single house index in the first half of 2011 rose 1.79 percent compared to last year.

The price index for townhouses rose by 3.55 percent while three-story townhouses index rose 4.07 percent.

**StrontiumDog** · 13-07-2011, 12:45 PM

Thai-ASEAN News Network

SME Bank: Wage Hike to Affect Retail Business

UPDATE : 13 July 2011

The Small and Medium Enterprise Development Bank of Thailand is concerned that the Pheu Thai Party's policy to raise the daily minimum wage to 300 baht will increase production costs for retail businesses.

It suggests the new government ensure economic stability before implementing the policy.

President of the Small and Medium Enterprise Development Bank of Thailand, or SME Bank, Soros Sakornvisava admitted that he is concerned about the Thai economy, which is influenced by global economic conditions.

He noted that product price increases in the country show no sign of slowing down, and the interest rate is likely to continue to increase. These factors could affect public spending.

As for the Pheu Thai Party's policy to raise the daily minimum wage of workers across the country to 300 baht, Soros said the hike will increase retail business production costs, especially for industries that require a large number of workers.

He said that the bank has given its clients information to help them prepare to deal with possible problems that could result from the wage hike.

The SME Bank president said the bank has not received further policies from the Finance Ministry, but he is confident the change in politics will have no effect on the bank's loan target.

He added that the bank has issued loans worth a combined nine billion baht during the first six months of the year, while total outstanding loans stand at 90 billion baht.

Soros said he believes that approximately ten billion baht worth of new loans is expected to be issued before year-end and will make the bank achieve its outstanding loan target of 100 billion baht.

The SME Bank has collaborated with the Business Development Department and the Franchise and License Association to organize a fair to provide loans to franchises with a minimum loan rate or MLR of 3 percent per year.

The fair will be held at SME Bank Tower on Phaholyothin Road from July 12 to 14.

**Lancelot** · 13-07-2011, 12:57 PM

There is a huge "gray" economy here in Thailand and I doubt that the minimum wage will apply there. Somchai's noodle stand staff will never see a 300 baht daily salary. Ditto for many of the construction common laborers-who aren't Thai nationals anyway

**Tom Sawyer** · 13-07-2011, 09:07 PM

Minimum wages are not inflationary. There's loads of evidence to prove that. Funny how all these news stories in Thailand don't quote any empirical evidence to back up their shite. If you can't make a profit by paying your 40 workers and extra 4 dollars a day - or 160 in total - you shouldn't be in business. And notice how they say "costs will increase 30%". They don't tell you what it would mean to the profit line. Labour is like 5% of costs here. So in reality the 'costs' would go from 5 - 7% or something like that.

**StrontiumDog** · 13-07-2011, 10:40 PM

A whole bunch of articles on the minimum wage today on TAN....rather than post them all, here are the links and highlights....

Industry Council Opposes Bt300 Minimum Wage
Wednesday, July 13, 2011
The Federation of Thai Industries is planning to consult with the Joint Standing Committee on Commerce, Industry and Banking on its opposition to the 300-baht daily minimum wage on the grounds that it will severely damage the whole economy.

Siam Cement Urges Govt to Reconsider Wage Hike
Wednesday, July 13, 2011
Siam Cement Group expresses concern about Thailand's competitiveness should the government raise the minimum wage. Siam Cement Group, or SCG, Managing Director Kalin Sarasin expressed his concern about the Pheu Thai government's policy to increase the minimum wage for workers, saying that it would also result in an increase in the prices of construction materials as production costs would go up.

New Minimum Wage Feared to Spark Massive Lay-offs
Wednesday, July 13, 2011
The Federation of Thai Industries has revealed the results of a survey, showing that up to 27.23 percent of manufacturers are planning lay-offs should the 300- baht daily minimum wage be implemented. Secretary general of the Federation of Thai Industries, Sommart Khunset, has revealed the results of a survey conducted on 512 firms from 40 industrial groups belonging to the federation on the topic of the 300-baht daily minimum wage.

CP All Supports Minimum Wage Hike
Wednesday, July 13, 2011
An executive of CP All voices support for the Pheu Thai-led government's policy to raise the daily minimum wage to flat 300 baht, saying it will increase purchasing power of consumers and spur spending. Even though many businesses have voiced opposition to the Pheu Thai Party's policy to raise the daily minimum wage of workers across the country to 300 baht, Suwit Kingkaew, Senior Vice President of CP All,operator of 7-Eleven convenience store chain, has expressed support to the policy.

Private Sector to Be Consulted on Wage Hike
Wednesday, July 13, 2011
Prime minister to be Yingluck Shinawatra is planning to discuss the 300-baht daily minimum wage with the private sector once her MP status is certified by the Election Commission. Meanwhile, she is receptive to the proposal submitted by businesses that the government help partly shoulder their increased costs. Yingluck Shinawatra, top MP-elect from the Pheu Thai Party who is tipped to be the next premier, said that once her MP status is certified by the Election Commission, she will meet with private businesses to discuss the possibility of integrating some of their suggestions into the implementation of the 300-baht daily minimum wage policy.

Business Leader Concerned over Wage Hike
Wednesday, July 13, 2011
A business leader in Buri Ram urges the Pheu Thai-led government to review its planned wage increase given fears that it could have an impact on the overall economy.. Chairman of Buri Ram Chamber of Commerce, Weeradej Tangtrongvejakit, said the Pheu Thai Party's policy to increase the daily minimum wage to 300 baht nationwide and to fix the starting salary for bachelor degree graduates at 15,000 baht a month would do more harm than good if they are implemented without considering the ability of business operators to pay.

**StrontiumDog** · 13-07-2011, 11:32 PM

Burmese Workers Strike for Extra 15 Baht

Burmese Workers Strike for Extra 15 Baht

By LAWI WENG
Wednesday, July 13, 2011

There are around 5,000 Burmese migrants in Three Pagodas Pass. The town has around 30 factories which produce gloves, textiles and shoes. (Photo: Lawi Weng)

More than 300 Burmese migrant factory workers in Thailand's Three Pagodas Pass have been on strike for three days after their employer refused to increase their pay by 15 baht per day.

Workers from the Watana Footwear Company—which produces shoes and other items—have demanded an equal amount of money as other factory workers in the area.

Aung Bo, a leading member of the strikers, said, “They told us to come and work today. But all of us made an agreement not go to work unless they gave in to our demands.”

Workers at the factory currently earn between 65 and 80 baht for a nine-hour workday, depending on their experience. This is a lot less than the average wage for Thailand, causing many workers to feel exploited.

They also requested that the company provides them with clean drinking water as they currently make do with untreated water from a pipe.

Around five leaders of the striking migrant workers met company bosses at the factory on Monday in order to negotiate a compromise.

But the employer refused to pay all workers their demands of an extra 15 baht, saying that he only pays the factory mangers an additional 20 baht. But he offered to pay workers who only get the 65 baht a day minimun an additional 15 baht on top.

“We want them to increase the pay of all of us so that we are equal. If we do not achieve this then we will tell all the workers here not to work for this company,” said Ko Nan Yee, one of the managers who participated at the meeting.

Around 400 Burmese workers also went on strike at a shoe factory owned by PTK Company last week to demand a raise of 20 baht per day. The workers reached an agreement after the employer agreed to pay an extra 15 baht a day.

There are around 5,000 Burmese migrants in Three Pagodas Pass, many of them coming from different parts of Burma. The town has around 30 factories which produce gloves, textiles and shoes.

Factory workers say that they have to pay around 2,200 baht a month for accomodation and food, and so their spare cash only comes to around 500 baht a month.

“We are only demanding what we need. It is not a strike for luxuries,” added Ko Nan Yee.

**DroversDog** · 13-07-2011, 11:52 PM

Originally Posted by StrontiumDog

Burmese Workers Strike for Extra 15 Baht

Burmese Workers Strike for Extra 15 Baht

By LAWI WENG
Wednesday, July 13, 2011

There are around 5,000 Burmese migrants in Three Pagodas Pass. The town has around 30 factories which produce gloves, textiles and shoes. (Photo: Lawi Weng)

More than 300 Burmese migrant factory workers in Thailand's Three Pagodas Pass have been on strike for three days after their employer refused to increase their pay by 15 baht per day.

Workers from the Watana Footwear Company—which produces shoes and other items—have demanded an equal amount of money as other factory workers in the area.

Aung Bo, a leading member of the strikers, said, “They told us to come and work today. But all of us made an agreement not go to work unless they gave in to our demands.”

Workers at the factory currently earn between 65 and 80 baht for a nine-hour workday, depending on their experience. This is a lot less than the average wage for Thailand, causing many workers to feel exploited.

They also requested that the company provides them with clean drinking water as they currently make do with untreated water from a pipe.

Around five leaders of the striking migrant workers met company bosses at the factory on Monday in order to negotiate a compromise.

But the employer refused to pay all workers their demands of an extra 15 baht, saying that he only pays the factory mangers an additional 20 baht. But he offered to pay workers who only get the 65 baht a day minimun an additional 15 baht on top.

“We want them to increase the pay of all of us so that we are equal. If we do not achieve this then we will tell all the workers here not to work for this company,” said Ko Nan Yee, one of the managers who participated at the meeting.

Around 400 Burmese workers also went on strike at a shoe factory owned by PTK Company last week to demand a raise of 20 baht per day. The workers reached an agreement after the employer agreed to pay an extra 15 baht a day.

There are around 5,000 Burmese migrants in Three Pagodas Pass, many of them coming from different parts of Burma. The town has around 30 factories which produce gloves, textiles and shoes.

Factory workers say that they have to pay around 2,200 baht a month for accomodation and food, and so their spare cash only comes to around 500 baht a month.

“We are only demanding what we need. It is not a strike for luxuries,” added Ko Nan Yee.

This is disgusting. The so called employers needs to be strung up by the short and curlys. Absolute scum of the earth!

**StrontiumDog** · 14-07-2011, 01:10 AM

'Only some will directly benefit'

'Only some will directly benefit'

By The Nation
Published on July 14, 2011

Setting the minimum daily wage at Bt300 is profitable for labourers but can be rather detrimental to the country's long-term chance of attracting foreign investment, director-general of the Department of Labour Protection and Welfare Amphorn Nitisiri said yesterday.

However, the boost will be useful for 5 million out of the 9 million beneficiaries of social security, and will lift their quality of life as well as attract out-of-system workers such as bringing farmers to general business, hospitality and production sectors, she explained.

The Bt300 minimum wage will also encourage businesses to employ Thais instead of hiring immigrants for the same amount, while the government could collect more tax through either income or value-added taxes, and the contributions to the Social Security Office would become higher, she added.

She said foreign employers' tendency to move away from Thailand based on the long-standing availability of cheap labour was nothing new. "Thailand is already facing this problem in industries like textiles and electronics," she said.

However, businesses that have a large workforce could face closure if the owners can no longer afford to increase the daily wage to Bt300 from the current average of Bt200-Bt215 currently, she said. "There are such 12,839 businesses hiring 588,000 people now," she added.

Labour Ministry permanent secretary Somkiat Chayasri-wong, as chairman of the national Wage Tripartite Committee, dismissed speculation that the three-party panel had been biased or faced political intervention.

Responding to an idea by the Pheu Thai Party to set up a fund subsidising SMEs at risk of collapsing, he said there had been no discussions and such a fund would require a colossal amount of money.

**dirtydog** · 14-07-2011, 01:24 AM

Originally Posted by StrontiumDog

The Bt300 minimum wage will also encourage businesses to employ Thais instead of hiring immigrants for the same amount,

Thats bollox, I would rather hire Cambodians, they actually want to work.

I used to pay 180baht to 450baht perday, 60 to 80 staff, I would have rather had all my staff being paid in the 400baht range, but, most were too fuking lazy or too fuking lacking in any skill set at all to warrant more than 200baht perday, if I was doing this now, 50 at least would be sacked tomorrow, they aint worth 300baht perday.

**StrontiumDog** · 14-07-2011, 01:27 AM

Wage hike worries workers

Wage hike worries workers

By WANNAPA KHAOPA,
MAYUREE SUKYINGCHAROENWONG
THE NATION
Published on July 14, 2011

It's a tough burden being a family breadwinner on a low income, but a group of Bangkok workers have explained how they use different ways of spending as little as possible on themselves, sparing most of their meagre earnings for family expenses.

All of them earn less than Bt300 daily, the minimum wage the Pheu Thai Party has promised the new government will introduce.

Pien, 45, a cleaner, earns Bt255 a day. Piyanut Suwannahong, 39, a factory worker, gets about Bt243. Sawai Klangyoon, 48, a worker at a construction-materials shop, is paid Bt200. Lamduan Chaichalard, 38, a construction worker, gets only Bt180.

Pien, a single mother, takes care of three children. One is unemployed and the other two are at high school. As well, she pays Bt2,200 per month to rent their apartment.

"My studying children and I need Bt180 a day, while my unemployed 16-year-old son spends Bt20. At weekends I cook only in the morning, which costs Bt70 to Bt80 a day, and we eat the same food in our three meals. This is how we reduce our expenses," she said.

Piyanut lives with her mother. She gives her mother Bt1,000 and pays Bt700 land rent every month. She makes about Bt7,300 per month, or as much as Bt8,000 or Bt12,000 if she works overtime.

She wants to buy a house, which will cost her up to Bt500,000, so she keeps her spending down to between Bt20 and Bt60 per day. She tries to bring cooked food from home for lunch and waits for free buses to save money.

"I set aside Bt3,000 before paying other expenses because I want to buy a house," Piyanut said.

Lamduan comes from Kalasin. Her husband is sick, so she has become the family's breadwinner. She sends Bt2,000 back home to her mother and husband every month.

"I spend Bt140 to Bt150 to buy food each day. Food is more expensive now. My income is too little. It is not enough to cover my expenses sometimes, so I borrow from my friends.

Although I work overtime, my daily wage still doesn't reach Bt300," she said.

Sawai can't earn extra money because he doesn't get overtime.

He spends Bt3,000 a month on his personal expenses, and sends his wife in Nakhon Phanom between Bt3,000 and Bt3,500. They have a child at primary school.

"Sometimes, the money I send them is not enough," he said.

All of the group welcome the Pheu Thai Party's plan to increase the minimum daily wage to Bt300, but are concerned that it will force food and commodity prices up and bring job losses.

"If prices are going to increase, you [the new government] should not increase my wage. It will cause me trouble, calculating higher wages and higher expenses.

"It will be difficult for me to manage," Pien said.

Sawai is worried that his employer will lay off some workers and he will be one of them.

Piyanut and Lamduan said that if commodity and food prices are not controlled, their lives would be the same - Bt300 per day or not.

**socal** · 14-07-2011, 01:33 AM

Originally Posted by Tom Sawyer

Minimum wages are not inflationary. There's loads of evidence to prove that. Funny how all these news stories in Thailand don't quote any empirical evidence to back up their shite. If you can't make a profit by paying your 40 workers and extra 4 dollars a day - or 160 in total - you shouldn't be in business. And notice how they say "costs will increase 30%". They don't tell you what it would mean to the profit line. Labour is like 5% of costs here. So in reality the 'costs' would go from 5 - 7% or something like that.

Minimum wages can be inflationary because when ever the business climate turns negative for a country (from minimum wage hikes, minimum wages period, war, tax hikes) the currency tends to sell off(inflation). If the baht falls to 35 then everything priced in dollars (oil)goes up by that amount.

**LooseBowels** · 14-07-2011, 04:46 AM

Well its obvious aint it.

The democratically elected government will easily afford the minimum wage hike by taking it off the amart junta blood sucking vermin

Don't need another MBA from harvard to work that one out.

**FailSafe** · 14-07-2011, 05:59 AM

I run one small business that makes me ~35K in a good month, and can just break even in a slow month- it used to do much better, but competition and rent increases have knocked down my profits. It's fairly hands-off and doesn't take much of my time, and it pays some of my daily living expenses, so I keep it going.

I pay the employees less than 9K each per month- there are five of them- if I have to raise their salaries, I will end up closing this business and they'll be out of a job- it just won't be worth it to me to keep it going (it can be a real hassle at times, and I have a rent increase coming up at the end of this year as well)- it won't really make a difference to me as far as my life goes as I have other, more profitable sources of income, but to them it will be a different story.

Remember that 'small business' in Thailand can have a much different (and much 'smaller') connotation than it does in the West, and an increase in minimum salary can have a huge effect on their viability.

If this proposed increase will only affect businesses with a higher number of employees it won't be an issue, of course- hopefully that's the case.

**Gerbil** · 14-07-2011, 06:10 AM

^ Well PT have already admitted they lied about this and it's for Bangkok only.

**sabang** · 14-07-2011, 06:50 AM

The economic performance of the Thaksin administration was rather good. I assume the Yingluck administration has access to the same, or similar, economic advice. Fiscally, they were pretty savvy actually- government debt was reduced under Thaksin, but has only grown since. Now that election time is over, and campaign promises are to be translated into reality (or not, as the case may be), the financial markets are telling you there is hardly reason for panic. Thailand's tax collection rate is currently one of the lowest in the world as a % of GDP, improve this and the government really doesn't have a funding problem. Hopefully though, some of this will go towards improving the education system and other long term investments rather than just improving the lot of the current poor, or underpaid. Reduce corruption, and a whole lot more money is freed for productive use. Basically, the Thai government does not have a funding problem- but it has chronic corruption and efficiency problems, and an entrenched bureaucratic element that fiercely resists reform. There is considerable room for improvement, to state the obvious.

As far as there being a higher minimum wage for Bangkok & surrounds than Provincial Thailand, it makes perfect sense to me. Whether PT 'lied' about this or not, given the penchant for misquoting or selectively quoting in the Bangkok media, I really wouldn't know.

**Gerbil** · 14-07-2011, 07:04 AM

Originally Posted by sabang

As far as there being a higher minimum wage for Bangkok & surrounds than Provincial Thailand, it makes perfect sense to me. Whether PT 'lied' about this or not, given the penchant for misquoting or selectively quoting in the Bangkok media, I really wouldn't know.

Whether they lied or not and whether it makes economic sense or not....

How are they going to explain it to the PT heartland who did vote for them, that they wont be getting it, but the voters in Bangkok (who didnt) will?

**Butterfly** · 14-07-2011, 07:41 AM

Originally Posted by Gerbil

How are they going to explain it to the PT heartland who did vote for them, that they wont be getting it, but the voters in Bangkok (who didnt) will?

good point, they will probably getting it in the form of free credit cards and mobiles in true Thaksin economics miracle

**Bettyboo** · 14-07-2011, 07:55 AM

^ spoken like a true yellow, excellent comment; keep up the good work for us, Paps; power to the people...

**Tom Sawyer** · 14-07-2011, 01:09 PM

Originally Posted by DroversDog

This is disgusting. The so called employers needs to be strung up by the short and curlys. Absolute scum of the earth!

Mae Sot is a good example. Right next to the border with Burma. Hundreds, maybe even thousands of small-to-medium size factories making clothing mostly. Slave Burmese labour basically - but on the Thai side of the border. No minimu wages or working standards in sight there..

**Rural Surin** · 14-07-2011, 07:18 PM

Originally Posted by Bettyboo

^ spoken like a true yellow, excellent comment; keep up the good work for us, Paps; power to the people...

Yes....the people.

**Butterfly** · 14-07-2011, 08:18 PM

yes, who are they ?

**Rural Surin** · 14-07-2011, 08:41 PM

Originally Posted by Butterfly

yes, who are they ?

It's a sceret. Yet promoted subliminally everyday.

**Tom Sawyer** · 14-07-2011, 08:56 PM

If you want to be taken seriously RS you need to engage. The re-incarnation all-seeing-sage act just gets you ignored. And you probably have quite a bit to contribute. Speak out mate - plainly. (and no I don't want a civil war - who would gain? Criminals maybe - not many others)

**Rural Surin** · 14-07-2011, 09:31 PM

Originally Posted by Tom Sawyer

If you want to be taken seriously RS you need to engage. The re-incarnation all-seeing-sage act just gets you ignored. And you probably have quite a bit to contribute. Speak out mate - plainly. (and no I don't want a civil war - who would gain? Criminals maybe - not many others)

I'd love to really speak out here, TS.
But I can't [even if I have much to offer]. What I might have to say can't be displayed here.
Easier to get caught up within the ever-growing delusioned fancy that there is a difference and change is eminent.

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