Thread: Minimum wage to increase by April 2011

^^ And with the greatest of respect to yourself as an individual small businessman, I listen to the likes of CP (Thailands largest employer), the big multinationals, economists etc considerably more than yourself. As someone who has personally been a director and major/ founding shareholder of a company that employed a few hundred people (including some in Thailand), I can assure you that minimum wages in Asia were never of the least concern to me- in fact, I wished they were higher in Thailand and the Fil's, so I didn't have to pay peanuts for monkeys. In common with many of your colleagues that support the Democrats, I consider your outlook shortsighted and nominally self serving- yet in the long term, the opposite. Nevertheless, I wish you well in your business- as I do all small businessmen, except scoundrels of course.

Originally Posted by sabang

In common with many of your colleagues that support the Democrats

That took longer than I expected.

Minimum wage in Thailand should be US$16
22-01-2012

Charoen Pokphand Group (CP) chairman and CEO Dhanin Chearavanont has suggested that Thailand's daily minimum wage should be as high as Bt500(US$16).

The Yingluck government is planning to boost the minimum wage to Bt300 per day nationwide to implement the ruling Pheu Thai Party's election pledge.

In the first stage, the Bt300-per-day minimum wage will be enforced in Bangkok and six other provinces from April this year.

In support of the government's policy, Dhanin said he believed the minimum daily wage should be even higher - at Bt500, not Bt300 - because of price rises and higher cost of living.

Judging by the current cost of living, Dhanin said Bt300 was still relatively low as a minimum daily wage.

However, some businessmen have complained that Bt300 is too high as Bangkok's current minimum wage is only about Bt240 per day, while other provinces have lower wages.

They want the government to raise wages gradually so employers have time to adjust.

But Dhanin, who also champions high farm prices, said at a seminar entitled '35 years of Nongwa and sustainable development': "A higher minimum wage policy should be supported because it will help farmers enjoy higher income. Labourers are not slaves.''

The CP boss - a billionaire who is one of the richest men in Thailand - said Thai farmers were poor because bureaucrats and politicians did not understand farmers and their circumstances; they created and implemented policies that did not support them.

"You can see that whenever prices for agricultural goods rise, the Commerce Ministry will issue a policy to push down the price, fearing city people will suffer from the price rise,'' he said.

"Whenever the egg price rises, the government imports eggs to help consumers, but farmers who have little capital aren't able to survive [for this reason],'' he said.

asianewsnet.net

Originally Posted by FailSafe

..it leads to three choices:

1. Eat the expense
2. Raise prices
3. Cut expenses somehow (most likely through the elimination of jobs if you're carrying redundancies, which many businesses- mine included- are)

You forgot the fourth - combine the three. Funny such a shrewd businessman as your good self would have missed that one..

^

I didn't say you had to choose only one...

In fact, some combination of the three is the only way to go. In the end I won't be affected too badly (as far as salary goes- price increases by suppliers might hurt my business further, though), and I've exaggerated the personal effect it will have on me to make the example a bit clearer (I doubt I will eliminate staff- most of my people have been with me for years and make more than the proposed new minimum anyway)- it will hit others way harder, though, and I know that jobs will be eliminated and prices will increase in some sectors (or the increase will be ignored entirely- enforcement will be an interesting issue, especially with many businesses paying people 'off the books').

If the minimum wage went up to 500 baht per day as the chairman of CP recommended above, THAT would be a real problem (lucky for him he made his billions on the low end of the scale).

I believe that this minimum-wage increase will lead to greater unemployment

That claim might have more strength it hadn't been deployed at every point where the power threatened to shift - no matter how slightly - from capital to labour. If you look at the arguments around the factory reform acts in 19th century Britain, you'll see it used over and over and over again. That doesn't mean it's necessarily wrong this time but it's worth bearing in mind that it's been wrong countless times in the past.

Originally Posted by FailSafe

If the minimum wage went up to 500 baht per day as the chairman of CP recommended above, THAT would be a real problem (lucky for him he made his billions on the low end of the scale).

Ah well, in Thailand it's not what you know - it's the feudal chinamen that you know.

^^

I don't think you can take Western examples and compare them to Thailand on this issue (you can't really do that in most situations), especially when you take into account the number of redundant employees most businesses carry here- also, the increase is pretty huge when looked at in terms of a percentage, when it could have been implemented in steps over a few years instead of in one shot.

I really don't think businesses will be hiring as many people at the new proposed minimum- it's fine for the people that will keep their jobs, but I'll be very surprised if the unemployment rate doesn't increase for manual laborers- I think some industries that currently rely on manpower (like farming) might finally bite-the-bullet and automatize their operations as it will be more cost-effective.

It's pretty much a standard argument. I'm sure if you could be arsed to do a cross-cultural research project on recent discourse surrounding labour-capital relations, this would feature as a cultural universal.

^

Maybe- we'll certainly find out soon enough- I've got an opinion based on what I know of a few different markets here, and I think I'm right- if it turns out I'm wrong, that will be fine with me, but I just can't see it working out well (especially for the first few years after its inception).

Any country that boasts it's comparative advantage as being a low-wage economy is doomed - and the people who pitch it that way deserve the (figurative) bullet in the head they will eventually receive.

Alterior motives? Only in Thailand would the trade unions side with the yellow fascists. Black is white here.

Originally Posted by StrontiumDog

move their production bases to other countries where the daily wage was one fourth the rate in Thailand.

75 baht a day? Where is this capitalist nirvana.

Originally Posted by Tom Sawyer

Alterior motives? Only in Thailand would the trade unions side with the yellow fascists. Black is white here.

Perhaps you should read the article again.

This would be the union:

The Thai Labour Solidarity Committee plans mass gatherings of workers throughout the country to pressure the government to immediately raise the daily minimum wage to 300 baht nationwide, TLSC chairman Chalee Loysoong said on Thursday.

This would be the industry group of owners:

Federation of Thai Industries (FTI) vice president Thanit Sorat said that lifting the minimum wage to 300 baht would result in a substantial increase in labour costs and manufacturers would not be able to shoulder it.

Appear the union is fully supporting the wage increase , but maybe there is a conspiracy in there somewhere I missed.


TH

Originally Posted by sabang

Originally Posted by StrontiumDog

move their production bases to other countries where the daily wage was one fourth the rate in Thailand.

75 baht a day? Where is this capitalist nirvana.

That would be Cambodia.

Cambodia Daily Minimum Wages = $1.67 (6,831.80 Riel)
In Thailand = $6.82 (206 THB)

http://www.nwpc.dole.gov.ph/pages/st...ges%202010.pdf
one quarter of $6.82 is $1.70.
TH

creates and perpetuates a permanent under class. dumb.

^^ Cheers for that TH, and it is an interesting PDF file- It would be nice to have a more recent one, as in YE 2011 not 2010, but anyway.

It rather tells you why Thailand will not benefit from a 'race to the bottom' on wage policy. Compete with Indonesia, Cambodia, and soon Burma? that's laughable. Role models should be Malaysia (with a minimum wage 250% of Thailand's), and China- where workers wages are inflating at a high rate, due to it's success in attracting investment. They are now getting close to par with Thailand, and I would wager the difference has decreased further since the end of 2010. If you compare minimum wages ten years ago in China to Thailand, there was a vast difference- and it pretty much tells you which country is doing better in attracting investment and employment, and doing a better job for it's citizens to boot.

Some Thai employers can, and predictably will, groan about the wage rise being "too high", but they conveniently neglect to mention the fact that they received a free ride under the Abhisit government- when wage rises were minimal, yet domestic price inflation was high. Compared to GDP per head, cost of living, and overall company cash flow, minimum wages (and wages overall) are abysmally low here, more reminiscent of a third world nation than an 'advanced developing country' as Thailand is now classified. This is absolutely no model for the future.

Thai-ASEAN News Network - Bt300 Minimum Wage Nationwide Affirmed for April 1

Bt300 Minimum Wage Nationwide Affirmed for April 1

UPDATE : 7 February 2012

The labor minister affirms minimum wage hike will become effective across the country on April 1.

By the year end, all provinces of Thailand will see a minimum daily wage raised to 300 baht per day.

Labor Minister Padermchai Sasomsap pointed out that provinces across Thailand will see a maximum of 40 percent daily wage increase on April 1.


The wage increase will be applied to the current minimum wage rate in each province.

The 7 provinces with the second highest minimum wage of 215 baht a day will see a hike of 80 baht or 39.5 percent.

Phayao, with the lowest per day wage, will see a hike of 40 percent or around 60 baht.

In Phuket, a province with the highest daily wage, the minimum daily wage will be raised by just 36 percent from the current 221 baht per day.

By the year end, the minimum daily wage will be increased to 300 baht a day across the country.

Padermchai added that he is not worried about businesses trying to file a petition with the Administrative Court to postpone the wage hike.

He explained the issue has been thoroughly discussed and endorsed by the tripartite committee comprising representatives from the government and workers.

The Federation of Thai Industries or FTI met with the labor minister yesterday, discussing the details of the planned wage hike.

Pardermchai said businesses will be given assistance to help them cope with the increase in cost in the form of corporate tax privileges.

Social security contribution by businesses will be slashed from 5 to 3 percent during the first 6 months.

The labor minister denies as many as 170,000 Thais are without jobs. In fact, the minister said there's a shortage in labor.

He said there are as many as 150,000 vacancies waiting to be filled.

Padermchai added that companies that were closed down admitted that they were forced to lay off 20,000-30,000 workers.

The minister said he's ready to help them find new employment.

http://www.bangkokpost.com/news/loca...bosses-workers

Entry wages backed by bosses, workers

• Published: 9/02/2012 at 12:00 AM
• Newspaper section: News

Employer and employee representatives want the minimum wage to be scrapped and replaced with an entry-wage system.

The representatives made their call during a seminar which looked at how to develop workers' potential and boost productivity in the industrial sector to accommodate the rise in the minimum daily wage, to at least 300 baht a day.

Increases in the minimum wage will take effect on April 1.

In seven pilot provinces _ Bangkok, Nonthaburi, Samut Prakan, Samut Sakhon, Nakhon Pathom, Pathum Thani and Phuket _ they will rise to more than 300 baht a day.

In other provinces, minimum wages will be raised by about 40%.

Thaworn Chalatsathian, the deputy secretary-general of the Federation of Thai Industries, said Thailand should scrap the minimum wage and replace it with a wage system for entry-level workers.

A labour source said the minimum wage is suitable for unskilled workers, both Thai and alien. The minimum wage has been raised every year, giving workers the chance to enjoy a pay rise annually.

If the government did not boost the minimum wage, workers' salaries paid by employers would not increase either. This is because most employers do not have wage structures in place for unskilled workers.

Following every minimum-wage hike, commodity prices always jump significantly.

Employers say the increase in salaries leads to higher labour costs, undermining their competitiveness.

Mr Thaworn suggested if the minimum wage system were to be scrapped, new workers' wages could be increased according to their productivity, the consumer price index and length of time in employment.

Pay rises at each business should increase in percentage terms rather than in absolute amounts of money, Mr Thaworn said.

Meanwhile, Manas Kosol, chairman of the Confederation of Thai Labour, said wage problems in Thailand derived from the fact there was no wage structure for unskilled workers.

Mr Manas said the Confederation of Thai Labour has resolved to push for the revocation of the minimum wage system and replace it with an entry-wage structure.

Wages could be increased in the second year of employment according to workers' salary structures and their potential.

Mr Manas added that most unskilled workers who have worked for several years were earning only slightly more than the minimum wage.

Many have to work more than one shift to earn enough money to support their families.

Well if there is going to be a coup, wanna bet it's before April 1st to avoid the change to a minimum wage? Embarrasing for the new Generals to roll back that one. So just run the coup before the law kicks in - presto!

Originally Posted by sabang

Role models should be Malayasia (with a minimum wage 250% higher that of Thailand's)...... an 'advanced developing country' as Thailand is now classified. This is absolutely no model for the future.

According to Wikipedia, Malayasia's min wage is around B7,000. They also have a much more skilled and educated workforce.

It would be interesting to know what makes Thailand 'an advanced developing country'. The place still seems feudal to me.

Pay policy driving local bodies to wall | Bangkok Post: news

Pay policy driving local bodies to wall

• Published: 10/02/2012 at 12:00 AM
• Newspaper section: News

The government's policy of raising the salaries of bachelor's degree holders is driving some local administration organisations to bankruptcy, the Municipality Assembly of Thailand said.

Sombat Chanasit, an executive member of the assembly, said about 80% of local administration staff nationwide will not be paid this month, if the government does not inject more money to cover their pay.

Some organisations' coffers were running dry because government subsidy makes up 10% of their budget.

Up to 10 billion baht, which should have been allocated to the local organisations, has been diverted as a development fund overseen by MPs.

The government policy of increasing the minimum salary for bachelor degree holders to 15,000 baht a month was also placing a heavy burden on the organisations.

Mr Sombat said each small local administration organisation is spending about 200,000 baht a month on salaries. For larger organisations, salaries account for up to 3 million baht a month in spending.

"Some of the organisations are going bankrupt," said Mr Sombat, also chairman of the tambon Mae Kree municipality in Phatthalung.

Meanwhile, Prime Minister Yingluck Shinawatra yesterday awarded local administrations with outstanding work and management for last year. The ceremony was held at Government House.

Ms Yingluck said local administrations played a key role in conveying government policy to local people.

Mae Hong Son Provincial Administrative Organisation (PAO) received the first place award for PAO.

The first place municipal administration was awarded to Phra Ngam Tambon Municipality in Lop Buri province.

The first place Tambon Administrative Organisation (TAO) was awarded jointly to Ban Moh TAO in Phetchaburi, Kud Chompu TAO in Ubon Ratchathani, Don Kaeo TAO in Chiang Mai, Chong TAO in Trang and Laem Klad TAO in Trat.