Minimum wage to increase by April 2011

**DroversDog** · 05-07-2011, 11:28 PM

Originally Posted by 9999

Does anyone know the details of the 300 THB policy?

According to the missus the whole thing is a cunning marketing ploy where they spray the board the '300 THB FOR ALL' whilst hiding the fine print.

The fine print is it only applies to skilled labour. Factory jobs etc. would not qualify, though experience also plays a part in qualifying. Also, there are tax breaks for businesses affacted by the new policy.

That's jusxst what the mrs says, anyone else hear that?

While nothing is certain until it is written in law, PT so far have implied that it included the lowest of paid Thai work force. We will have to see if it also filters down through the dodgy employers of foreign workers. Most are already non-complient with the current arrangements and will most likely not pass any benefits on.

For the falang community there is no word on any increase for bar fines.....

**Bangyai** · 05-07-2011, 11:55 PM

Originally Posted by Butterfly

it's actually the right thing to do,

manufacturers can afford it, they have been making record profit

It is the right thing to do. As Buriram Boy says , 7200 is hardly a living wage for a working class family to get by on in this day and age.

More money in the hands of lower paid workers will get spent within the Thai economy and will translate into increased demand for essentials and manufactured goods which in turn will help keep factory workers in employment and factory owners in business. If you want to stimulate domestic demand then people need a reasonable amount of disposable income. A quick walk around any mall will easily prove that 7200 a month does not go far.

As for this stimulating illegal employment of cheap labour from neighboring countries, we have recently seen a crackdown on this and can expect it to continue. A large percent of the wage paid to an overseas worker will obviously end up overseas which is not going to be much help to the Thai economy.

**Dick** · 06-07-2011, 12:15 AM

pay monkey $10 to work all day , u still get shit quality in Thailand

**DroversDog** · 06-07-2011, 12:30 AM

Originally Posted by Dick

pay monkey $10 to work all day , u still get shit quality in Thailand

You should look to stop wasting your money on monkeys and pay real people.
Most falangs would die of dehydration trying to do the work same Thais do working their land.
I would rather pay them the 300 baht and use the change to buy some beer!

**FailSafe** · 06-07-2011, 05:40 AM

Originally Posted by Bangyai

It is the right thing to do. As Buriram Boy says , 7200 is hardly a living wage for a working class family to get by on in this day and age.

The point is that many smaller businesses (say, 15-20 employees) run by single owners are going to lay people off in order to save on payroll costs when this ends up costing them 50K out-of-pocket if they keep the same number of staff.

**Bobcock** · 06-07-2011, 06:38 AM

The rich have got super rich on the backs of cheap labour, they won't want to change....

Even in a company like mine you can see the pain in the managements faces when you recommend someone for a pay rise.

Frankly some of my guys are way overpaid for the work they do, but I say fuck it, I always fight for more money for them (apart from one....)

**9999** · 06-07-2011, 09:03 AM

Originally Posted by FailSafe

The point is that many smaller businesses (say, 15-20 employees) run by single owners are going to lay people off in order to save on payroll costs when this ends up costing them 50K out-of-pocket if they keep the same number of staff.

Maybe not if there are tax breaks I think we should wait to see the actual policy before jumping to conclusions. I doubt they're out to intentionally destroy the Thai economy, stupid as they may be.

**Buksida** · 06-07-2011, 09:04 AM

Originally Posted by Bobcock

How do they increase the minimum wage for farmers for example because the Rice Middle men habitually fuck them over.......

They've promised to maintain a price of 20k per tonne of rice. Another frightening policy.

**FailSafe** · 06-07-2011, 09:12 AM

Originally Posted by 9999

Originally Posted by FailSafe

The point is that many smaller businesses (say, 15-20 employees) run by single owners are going to lay people off in order to save on payroll costs when this ends up costing them 50K out-of-pocket if they keep the same number of staff.

Maybe not if there are tax breaks I think we should wait to see the actual policy before jumping to conclusions. I doubt they're out to intentionally destroy the Thai economy, stupid as they may be.

Personally, this is going to potentially cost me money- I'm already making plans to downsize my work-force in a couple of small businesses if the wage increase goes through as my personal income will take a hit to the point where continuing to run things with employee numbers at their current level will be cost-prohibitive (I only employ people 'on the books' and pay all taxes and social insurance payments every month)- I would probably shut them down otherwise as they would no longer be worth the effort it takes to pull some money out of them.

**Buksida** · 06-07-2011, 09:13 AM

We employ around 20, some get min and some get up to 300 plus bonuses and overtime.

Paying more and maintaining the same profits would be possible if the staff were more productive, however this would mean sacking staff.

The policy of 15k for fresh grads is the worst, as this bunch learnt little at school besides how to sit up straight.

Thais aren't the best workers. It would be interesting to hear comparisons of workers in neighboring countries.

**Loy Toy** · 06-07-2011, 09:36 AM

Basically all these promises were made without any thought about how it will affect the big picture.

Thailand although having no natural resources, well apart from rice and other agriculture products, has done well in the past to become the second largest S. E Asian economy mostly on the back of the foreign currencies buying exports including investing in the Taboo industry.

Having read through Jingluck's election promises she will destroy the Thai economy overnight.

**Butterfly** · 06-07-2011, 09:40 AM

Originally Posted by Buksida

They've promised to maintain a price of 20k per tonne of rice. Another frightening policy.

let them do it, it will actually hurt the poor more than the rich, let them eat the cake and have it for electing populist opportunists

**Buksida** · 06-07-2011, 09:51 AM

Originally Posted by Loy Toy

Having read through Jingluck's election promises she will destroy the Thai economy overnight.

They will have to choose between keeping their promises and the survival of the economy. I think it will be the latter, they have their huge majority and I doubt they are worried about the poor chasing them out of office.

**Loy Toy** · 06-07-2011, 09:56 AM

Originally Posted by Buksida

I think it will be the latter, they have their huge majority and I doubt they are worried about the poor chasing them out of office.

Yes, because the poor majority (and with all due respects) have no idea about politics, economics or how the game is played.

That's why PT are where they are today and I hope they do not let Thailand down as the next few years are probably the most important in the last 50 years.

**Sakeopete** · 06-07-2011, 09:58 AM

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.

**Buksida** · 06-07-2011, 10:09 AM

Originally Posted by Loy Toy

Originally Posted by Buksida

I think it will be the latter, they have their huge majority and I doubt they are worried about the poor chasing them out of office.

Yes, because the poor majority (and with all due respects) have no idea about politics, economics or how the game is played.

At least the poor and uneducated have an excuse. Look at the policy for graduates salaries, surely ppl with that level of education should understand there is no free lunch.

**DrB0b** · 06-07-2011, 10:13 AM

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.

**robuzo** · 06-07-2011, 10:43 AM

Banksters. Bunch of parasites.

**StrontiumDog** · 06-07-2011, 12:53 PM

http://www.nationmultimedia.com/2011...-30159600.html

Minimum daily wage of Bt222 approved in principle

By THE NATION
Published on July 6, 2011

A sub-panel of the Bangkok Wage Tripartite Committee (WTC ) yesterday proposed a Bt7 increase to the top minimum wage of Bt215, which is already in effect in Bangkok.

Ammorn Chaowalit, an adviser to the sub-panel, said yesterday that the new rate of Bt222 was acceptable to employers, employees and the authorities and had been approved initially as a proposed rate.It could be approved officially by the WTC in October, Ammorn said. Another hike next January, if demanded by employees, would be decided based on new factors at the time, including inflation, he added.

The sub-panel and the WTC have not yet discussed a flat Bt300-per-day wage, raised as an election promise by the Pheu Thai Party, which will now lead a five-party coalition to form a new government.

"Such a policy will rest with the new labour minister," he said.

At a Bangkok seminar yesterday, employers and academics on labour cautioned the new government against a possible policy to raise the daily minimum wage to a flat Bt300.

Pannaphong Itthiatthanont, a member of the WTC, said the wages were always calculated realistically based on several factors and must be approved jointly by the authorities and employees.

Ammorn said a Pheu Thai proposal to restructure the WTC to make future hikes easier would need a legal amendment - but it could also result in consequences for the entire production sector.

The Labour Ministry would need to initiate an amendment for the government's approval before a two-year process could begin, he added.

Associate Professor Lae Dilokwitthayarat of Chulalongkorn University's faculty of economics said the three-party mechanism was necessary for the entire business and production sectors to continue, or even survive.

High wage rates without good reason would only result in high production costs and product prices.

The group most affected by high wages would be small and medium-sized enterprises, which employ the most people.

They would need to be subsidised or helped by other government measures, if the wages could be raised independently by the government without a counterbalance from employers.

**9999** · 06-07-2011, 01:51 PM

Originally Posted by Loy Toy

Having read through Jingluck's election promises she will destroy the Thai economy overnight.

Fair enough you guys in business would know better than me; so they really are stupid enough to destroy the economy eh. I gave the Shinno family a little bit more credit than that. Obviously little Yingas didn't dream this one up herself.

I hope for yall sake they break the promise on this one.

**StrontiumDog** · 06-07-2011, 05:43 PM

Bangkok Post : Industry opposes B300 daily wage

Industry opposes B300 daily wage

Published: 6/07/2011 at 01:13 PM
Online news: Local News

The incoming government should review its policy to raise the daily minimum wage to 300 baht because manufacturers would not be able to carry the added labour cost, the chairman of Khon Kaen Federation of Industries said on Wednesday.

“Industrial plants might have to close down, or move their production bases to other countries,” Withoon Kamolnaruemeth said.

Mr Withoon admitted that manufacturers were truly worried about the 300 baht a day policy championed by the Pheu Thai Party.

He said no other country [in the region] had a policy for the same daily wage level nationwide. The daily minimum wage should be set in line with living costs of each province, which varies.

“The current minimum wage in Khon Kaen is 169 baht a day. If it is raised to 300 baht, the increase would be about 90%," he said.

No manufacturer could bear such sharp increase in labour costs and they would have no option but to lay off workers, stop operations or transfer their production bases elsewhere.

Therefore, this policy should be reviewed, Mr Withoon said. The private sector would also meet soon discuss this issue and search for a solution.

He said that outside the indutrial sector, the negative impact of this policy would also be felt by ordinary people, civil servants and employees of other private firms.

They would face higher prices for consumer goods, which would rise in line with the increase daily wage.

**StrontiumDog** · 06-07-2011, 11:05 PM

Thai business fears wage inflation under new government | Reuters

Thai business fears wage inflation under new government

By Ploy Ten Kate and Michael Perry
BANGKOK | Wed Jul 6, 2011 4:21am EDT

(Reuters) - Thailand's central bank on Wednesday expressed concern over inflation, as business leaders fear a wage-price spiral if the newly elected government goes ahead with billions of dollars in spending.

Prime Minister-elect Yingluck Shinawatra won a landslide election victory on Sunday on a platform of populist policies which include wage rises, a household debt moratorium and better welfare and healthcare.

One proposal is for a nationwide minimum wage of 300 baht ($9.8) per day, as much as 90 percent higher than the current minimum set for each province around the country.

That would be a huge amount for manufacturers to absorb, said Richard Han, CEO of integrated circuit packager Hana Microelectronics Pcl.

"Two things will happen: either they will make less money or they'll try to put their prices up and cause inflation ... This could put you on a (wage-price) spiral," he said.

Annual inflation in Southeast Asia's second-largest economy hit 4.19 percent in May, its highest since September 2008. It stood at 4.06 percent in June.

"High inflation will hurt people's purchasing power and as a result may affect consumption," said Governor Prasarn Trairatvorakul, adding the new government's policies would be considered at a policy meeting on July 13.

Economists expect the Bank of Thailand to raise its policy rate by a quarter of a point to 3.25 percent at that meeting and see it at 3.75 percent by the end of 2011 rather than the 3.50 percent they had expected before the election.

FOREIGN INVESTORS

The central bank chief said he expected foreign money to flow into Thailand in the second half of 2011 as worries about political instability eased and with concern growing over economic conditions in Europe and the United States.

But business leaders said a rising wage bill may deter offshore investors.

"Any wage adjustment should really go in line with market mechanisms. Foreign direct investment is still a key foundation that drives the economy in this country," said Viboon Kromadit, chief operating officer of industrial land developer Amata Corp.

Higher wages could also undermine exports, especially in agriculture, damaging a sector that employs millions.

The Thai economy expanded a robust 7.8 percent in 2010 and is projected to grow 4.0-5.0 percent in 2011, fueled by strong export growth and increased consumption.

Businesses urged the new government to proceed slowly.

"Personally I think the pace of the wage rise should be gradual rather than a sharp hike," said Thammarat Chokwatana, executive vice-president of I.C.C International Pcl, part of Saha Group, Thailand's leading consumer product group.

"Otherwise it's going to affect product prices in the market and could ultimately drive up living costs and cause even higher inflation," Thammarat said.

**StrontiumDog** · 06-07-2011, 11:07 PM

^Abhisit looks unwell in that photo...

**DroversDog** · 06-07-2011, 11:23 PM

Originally Posted by StrontiumDog

A sub-panel of the Bangkok Wage Tripartite Committee (WTC ) yesterday proposed a Bt7 increase to the top minimum wage of Bt215, which is already in effect in Bangkok.

7 Baht increase per day?
Are they serious?
That is lucky to keep up with inflation.
What an insult.......
I bet the committee has got a much more generous increase over the years of their service.

**StrontiumDog** · 07-07-2011, 12:55 AM

Quality products, not cheap labour, Pheu Thai policy: Jaruphong

Quality products, not cheap labour, Pheu Thai policy: Jaruphong

By The Nation
Published on July 7, 2011

Pheu Thai secretary-general Jaruphong Ruengsuwan said his party's election promise to increase the daily minimum wage to a flat Bt300 would help labourers stand on their own feet.

"From now on cheap labour will no longer exist in Thailand, and with this policy, skills of workers will be upgraded and a policy to make only high-quality products adopted, to accommodate a party policy - Year 2020," he said.

Asked whether this policy would result in foreign companies migrating from Thailand, he said the Pheu Thai-led government would subsidise operations of Thai firms in other countries where labour is cheap.

Citing a study by the International Labour Organisation, he said the daily minimum wage should be Bt441 - a rate he said would by sufficient to feed and support a labourer with a wife and a child in one day.

Jaruphong dismissed criticism that the Pheu Thai Party would want to scrap the wage tripartite structure, saying it would want to make the Wage Tripartite Committee truly represent employees.

The highest minimum wage is now Bt215 paid in Bangkok. An adviser to the WTC said on Tuesday that the most practical increase would be Bt7, which could be approved by October at the earliest.

He said another promise to pay a minimum salary of Bt15,000 to government officials at entry level would continue, and could be implemented by October. Personal income tax could be lower by January.

Caretaker Labour Minister Chalermchai Sri-on warned against approving the flat Bt300 rate, saying it would result in a higher cost of living and higher commodity prices.

He said the Bt15,000 promise would also affect the entire financial structure and burden fiscal policy, because those now receiving less than Bt15,000 would not accept new officials getting more than they did, and would demand equal or higher salaries.

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