Thread: Minimum wage to increase by April 2011

http://thainews.prd.go.th/en/news.php?id=255406080004

FTI preparing for minimum wage hike



BANGKOK, 8 June 2011 (NNT) – The Federation of Thai Industries (FTI) is preparing measures to cushion the policy of many political parties to increase the minimum wage for fear of impact to business operation.

FTI Vice Chairperson Tanit Sorat said a survey is being conducted and its result will be raised for discussion among FTI members in a hope to formulate measures to deal with wage increase in case it becomes concrete. The result will also be presented to Labour Minister Chalermchai Sri-on and political parties on 20 June 2011 when a seminar is arranged to reflect the private sector’s opinions for the consideration of a new government.

Representatives from five political parties, including Democrat, Pheu Thai, Bhumjaithai, Chart Thai Pattana and Chart Pattana Puea Pandin will also be invited to join the seminar since each party has its own policy regarding this issue.

Although the private sector is not against the minimum wage rise policy, Mr Tanit said it is worrying that different businesses are able to adjust themselves to the policy at a different pace; therefore, wages should be adjusted according to the living costs.

The private sector is suggesting that minimum wage rise should not be higher than 20 baht a day or 10%. It is also stressing that the issue should be considered by the tripartite private sector committee, not by the interference of the political sector.

FTI propose Bt226 as minimum daily wage

FTI propose Bt226 as minimum daily wage

By The Nation
Published on June 9, 2011

The Labour Ministry yesterday welcomed the Federation of Thai Industries' higher proposal for a daily minimum wage of Bt226, describing it as a sign of employers' cooperation to get the much-awaited hike approved.

The FTI proposal was Bt31.21 higher than the Bt226.67 proposed recently by the ministry, permanent secretary Somkiat Chayasriwong said. The precise figure would be submitted for consideration at a meeting of the Wage Tripartite Committee on June 16.

Members of the committee held a preliminary meeting yesterday to discuss figures and reportedly encourage each other to reach a middle ground over the rates.

Chalee Loisoong, a labour representative, said a daily wage of Bt226.67 was not enough, but it was better than nothing. He said, based on the 4-per-cent inflation, Bt441 per day would be just enough. However, he said, employers could make up for this by providing cheap incentives and better welfare to make up for the workers' lost income.

Thawee Techatheerawat, another labour representative, said Bt226.67 was acceptable, because increasing it to Bt300 would prompt foreign companies to leave Thailand for countries where labour is cheaper. Instead, he said, businesses should offer incentives like free or low-cost transport and cheap meals. He also called on the government to strictly control the price of necessities such as cooking oil and rice.

http://thainews.prd.go.th/en/news.php?id=255406090005

FTI: Entrepreneurs disapprove minimum wage rise



BANGKOK, 9 June 2011 (NNT) – The Federation of Thai Industries (FTI) has cautioned political parties about impact of their campaign strategy to increase minimum wage when it is implemented.

According to FTI Chairperson Payungsak Chartsutipol, the FTI will present the result of its survey conducted from 2 to 6 June 2011 among entrepreneurs on labour problems and minimum wage hike, to a meeting with political parties it will arrange on 20 June 2011.

The survey showed only 2.2% of the respondents believed that their businesses would not be affected by the policy. 5.6-11.0% said impact would be minimal while 9.0-37.1% said theirs would be in the middle range. 42.7-68.5% of them said the impact would be vast while and 6.7-16.9% said it would be so severe that it could lead to closure of their business.

The average minimum wage proposed by the respondents stands at 226.67 baht a day. The figures for the central region, the North, the East, the South and the Northeast are 231.8, 223.2, 203.33, 209.37 and 190 baht respectively.

In addition, 39.1% of the respondents did not want any political parties to include minimum wage hike in their campaign strategies. 18.8% of them wanted the authorities to curb inflation and living costs while 9.4% asked the authorities to uplift labour quality.

Mr Payungsak explained that minimum wage in the past was increased gradually and adjustment was done through the tripartite panel; however, lately the adjustment has been made at a jumping step forcing the capital cost and retail prices to rise which results in minimum wage adjustment again to match the rising cost of living.

Wage rise to be considered shortly

Wage rise to be considered shortly

By The Nation
Published on June 14, 2011

Members of the Central Wage Committee will consider a new rate for the minimum daily wage on July 6, three days after the election.

An increase is likely even though the Federation of Thai Industries (FTI) has said a wage hike may cause some employers to go out of business.

The FTI has claimed that between 6.7 and 16.9 per cent of businesses may have to close down if a major wage hike is approved, and the possibility is highest in the East.

"The information is worrying," Labour Ministry deputy permanent secretary Sunan Phothong admitted yesterday. But he said wages would have to rise in the face of soaring living costs.

He pointed out that after government schemes to provide free bus and train rides, plus free electricity and tap-water for low-income households, expire at the end of this month, living costs would soar even further.

A Labour Ministry survey showed that the minimum daily wage averaged Bt176 across the country, lower than what it should be when living costs were taken into account.

However, Sunan fell short of saying how much the minimum wage would rise by.

He said provincial wage panels would propose the new rates to his sub-panel by June 20 next Monday.

"We will analyse and summarise the proposals for the Central Wage Committee to consider," he said in his capacity as chairman of the academic sub-panel on wages.

He said his sub-panel would take into account the inflation rate reported by the Bank of Thailand, the Consumer Price Index compiled the Commerce Ministry, and economic figures reported by the National Economic and Social Development Board.

Originally Posted by StrontiumDog

He pointed out that after government schemes to provide free bus and train rides, plus free electricity and tap-water for low-income households, expire at the end of this month, living costs would soar even further.

I was not aware the free electricity for low users scheme was to end?

that is at odds with this article from May 19 2011. If it is to end, quite an impact in rural areas especially for those dependent on seasonal/casual work for their income.

Firms pay extra to finance Govt's free electricity policy
By The Nation

Starting July, medium and large-sized enterprises and government units will start paying extra 11 satang per unit for electricity cost, to help finance the government's free electricity policy, said Kawin Thangsupanich, secretary-general of the Energy Regulatory Commission.
It is estimated that the policy to waive electricity fees for households consuming no more than 90 units a month will cost Bt12 billion a year.

The fees will be shown in the new power bills, which will clearly state the generating and distribution costs.

At the press conference today, the commission also revealed the result of the public opinion survey. The commission won 2.48-3.10, out of full 5-points score. The survey showed that individual power users have low expectation on the commission, but business operators expect it to play a bigger intermediary role.

Bangkok's minimum wage may be raised by Bt5-9

Bangkok's minimum wage may be raised by Bt5-9

The daily minimum wage in Bangkok will likely climb up by between Bt5 and Bt9.

"We have agreed that the raise should be in this range but we have not yet concluded on the final figure," Ammorn Chaovarit said Friday. She is an advisor to a sub-panel on Bangkok's minimum daily wage, which now stands at Bt215.

The wage hike is expected to take effect soon given that the inflation rate is now touching 3.3 per cent.

The Nation

Thai Vote to Pay Off for Workers, No Matter Who Wins - WSJ.com

Thai Parties Promise Big Wage Raises Ahead of Election

By JAMES HOOKWAY

BANGKOK—Thailand is bracing for a tumultuous election on July 3. But no matter who wins, the cost of doing business here is set to rise, as both the main political parties promise to raise wages dramatically when the vote is over.

The increases mean Thailand is likely to become the latest country in Asia, including China, to see wages shoot higher after years of rapid economic growth. That growth has translated into more upward pressure on wages, as workers demand higher pay, forcing companies to pay more for everything from factory workers to farm hands.

In Thailand's case, the military-backed Democrat Party is promising to raise minimum wages by 25% over the next two years if it stays in power. Supporters of ousted populist Thaksin Shinawatra, who are leading opinion polls, are pledging an increase of 40%.

Analysts say it is likely that at least some of the proposed increases will be enacted. The plans reflect a deepening realization among Thai policy makers that the country needs to strengthen its domestic economy to better protect itself from lurches in global demand for its exports, although the extent to which a new government can drive up wages will depend in part on how secure it is in the aftermath of the July 3 vote.

Local businesses are concerned about the impact, as is Thailand's central bank. Bank of Thailand Gov. Prasarn Trairatvorakul warned earlier this month that higher wages and other spending initiatives could drive up inflation—which hit 4.2% year-to-year in May—and threaten the country's recovery from the 2008 global slump.

Big exporters say the increases could put them out of business, further increasing costs at a time when an appreciating Thai baht has already made their products less competitive overseas.

The politicians competing on July 3 say Thailand has no choice but to raise pay.

The country's mainstay export sector has been losing ground to cheaper, less-developed rivals such as Vietnam and Bangladesh, leaving Thailand vulnerable if it continues to rely on low-cost, export-oriented manufacturing to drive the economy. Raising wages, they say, will create a new engine of growth by boosting consumer spending, which currently accounts for only 54% of Thailand's economy, compared to about 70% in the Philippines and more than 60% in Indonesia.

"Our currency is getting stronger so we're not attracting those kinds of investors who seek out the cheapest base for production," said Korn Chatikavanij, Thailand's British-born, Oxford-schooled finance minister, in an interview. That means consumption must increase, he said.

Mr. Korn's competitors in the election match him. From his overseas base in Dubai, Mr. Thaksin, who was toppled from power in a 2006 coup, describes Thailand's push to develop a stronger consumer economy as "crucial."

His proxy in the race to become prime minister, his youngest sister, Yingluck Shinawatra, agrees. "For the past five years, Thailand hasn't been able to generate enough wage growth, while household costs have risen sharply," she said in an interview on the campaign trail around Bangkok. "Now is the right time to expand consumption here in Thailand."

Some analysts deride the proposals as little more than populist vote grabs. Thailand's political conflicts run deep, with military-backed royalists fighting bitterly in recent years to prevent a return to power of Mr. Thaksin and his allies, who enjoy widespread support in lower-income rural areas. Clashes between the two sides in Bangkok last year left more than 90 people dead.

But the arguments over how to reorient Thailand's economy are important, economists say, especially as more international money flows into the region, boosting currency values and undermining some countries' low-cost advantages as manufacturing hubs.

Currencies in Southeast Asia, once the world's low-cost factory floor, have risen in value by a third or more against the U.S. dollar over the past five years, at a time when China has put the brakes on the ascent of its yuan.

A slew of Asian nations have adopted minimum wages over the past 10 years, even if just a few workers benefit from them, as in Cambodia, where only textiles and footwear workers are guaranteed a minimum income. Malaysia this week became the latest to attempt to put in place a minimum wage law after a new proposal was introduced to the Malaysian Parliament earlier this week.

Still, a wage increase might not be the quick fix its proponents claim, economists warn. Higher inflation could undermine the benefits from higher wages by putting some goods further out of reach of lower- and middle-class shoppers, as has been happening in some countries like China.

It could also force central banks in Thailand and elsewhere to raise interest rates more than they would have otherwise—curbing growth.

"I think that all across Asia governments are trying to move in this direction. We do need to depend more on our own domestic demand," said Thanomsri Fongarunrong, an economist with Phatra Securities PCL in Bangkok. "But we can't just rely on a minimum wage. We also need to improve productivity and output."

Thailand's Mr. Korn says he thinks there is room to boost pay. He says he decided to back the move to increase the minimum wage after organizing cash handouts to ameliorate the worst impact of the global financial slump. In early 2009, 50,000 people a month were losing their jobs in Thailand, and there were widespread fears that the country of 65 million could see over 2 million unemployed.

One of Mr. Korn's responses was to hand out 2,000 baht, or $70, checks to anybody earning less than $500 a month. The total outlay was around half a billion dollars.

The impact seemed almost instantaneous. Thai shoppers began spending in droves, providing a shot in the arm to local businesses which, in turn, began hiring to keep up with demand. Private consumption in 2009 hit 4.99 trillion baht, or $166 billion at current exchange rates, keeping pace with 2008's pre-slump figures. It expanded to 5.43 trillion baht, or $181 billion in 2010, buoyed in part, too, by rising agricultural prices in world markets.

Now, the Thai economy is at full employment even as the baht continues to rise, encouraging the government to press ahead with its bid to raise wages.

Under the Democrat plan, Bangkok minimum salaries will rise to 268 baht, or around $8.96 a day, from 215 baht, although many people working in the informal sector—a large portion of Thailand's working population—won't receive anything and risk seeing inflation climb further. Migrant laborers from Myanmar, Cambodia and Laos are unlikely to gain, either.

The opposition Puea Thai, or Thai Pride Party, proposes pushing the minimum wage up to 300 baht, or $10, a day.

Originally Posted by StrontiumDog

[B]
Bangkok's minimum wage may be raised by Bt5-9

The daily minimum wage in Bangkok will likely climb up by between Bt5 and Bt9.

"We have agreed that the raise should be in this range but we have not yet concluded on the final figure," Ammorn Chaovarit said Friday. She is an advisor to a sub-panel on Bangkok's minimum daily wage, which now stands at Bt215.

The wage hike is expected to take effect soon given that the inflation rate is now touching 3.3 per cent.

The Nation

It`s funny that the wage raise has got so much attention in the media when the final increase barely will cover the inflation.

What about a tax increase for the filthy rich instead, so that the government can give incentives to farmers and that like. Construction workers should get an increase anyhow. Raised prices for new apartments or condos won`t effect them anyway as they usually live in shacks.

Concern over promise for Bt300 minimum daily wage

Concern over promise for Bt300 minimum daily wage

By The Nation
Published on July 5, 2011

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

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

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

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

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

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

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

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

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